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7. A corporation borrows 25000 lei at an interest rate of 8% in order to finance an investment project with a four years life. The
7. A corporation borrows 25000 lei at an interest rate of 8% in order to finance an investment project with a four years life. The credit covers 40% of the investment outlay, the difference being covered by equity at a cost of equity of 13%. The credit will be reimbursed during the next four years in equal principals. The project is expected to generate constant earnings per share of 18000 lei per year.
Compute the NPV of the project and fill in the table:
CF 1 | CF 2 | CF 3 | CF 4 | CMP | VAN |
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