Question
A firms investments cost $80000 and are expected to return $115000 before taxes at the end of 1 year. The firm is financed with $70000
A firms investments cost $80000 and are expected to return $115000 before taxes at the end of 1 year. The firm is financed with $70000 debt at an expected rate of 5%.The firm pays taxes at the marginal rate of 40%, and the appropriate cost of capital is 8%. What is the NPV of the firm if it is all equity financed?
(13,519)
(19,444)
13,519
19,444
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Financial Management Theory and Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
2nd Canadian edition
176517308, 978-0176517304
