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A firm is considering a 49 million project with unlevered after-tax cash flows (FCF) of 3.4 million per year in perpetuity. The firm's cost ofdebt
A firm is considering a 49 million project with unlevered after-tax cash flows (FCF) of 3.4 million per year in perpetuity. The firm's cost ofdebt is 6.9%, and its cost of equity is 12.3%. The firm's target debt-to-value ratio is 60%. The project has the same risk as the firm's existing businesses, and it will support the same amount of debt. The firm's tax rate is 30%. Should the firm accept the project? 15 Points
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