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A firm has projected the following financials for a possible project: YEAR 2 3 4 5 Sales 139,928.00 139,928.00 139,928.00 139,928.00 139,928.00 Coro Cost of
A firm has projected the following financials for a possible project: YEAR 2 3 4 5 Sales 139,928.00 139,928.00 139,928.00 139,928.00 139,928.00 Coro Cost of Goods 66,488.00 66,488.00 66,488.00 66,488.00 66,488.00 S&A 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00 Depreciation 22,123.60 22,123.60 22,123.60 22,123.60 22,123.60 Atte Investment in NWC 1,015.00 573.00 573.00 573.00 573.00 573.00 Investment in Gross PPE 110,618.00 The firm has a capital structure of 33.00% debt and 67.00% equity. The cost of debt is 8.00%, while the cost of equity is estimated at 14.00%. The tax rate facing the firm is 39.00%. (Assume that you can't recover the final NWC position in year 5. i.e. only consider the change in NWC for each year) What is the NPV of the project? (Hint: Be careful about rounding the WACC here!)
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