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A firm with no preferred stock outstanding has a debt-to-equity ratio of D/E = 1.25, an effective annual before-tax cost of debt of 6.5%, and
A firm with no preferred stock outstanding has a debt-to-equity ratio of D/E = 1.25, an effective annual before-tax cost of debt of 6.5%, and a cost of equity of 14.2%. Additionally, the firm faces a 32% tax rate.
A firm is considering a project with zero NWC or salvage cash flows. What is the NPV of a project with an initial investment of $12 million that generates incremental after-tax cash flows of OCF= $2,000,000 per year over the project's 10 year life?
please do not use excel
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