Question
A project costs $18.8 million and is expected to produce cash flows of $4.2 million a year for 10 years. The opportunity cost of capital
A project costs $18.8 million and is expected to produce cash flows of $4.2 million a year for 10 years. The opportunity cost of capital is 13 percent. If the firm has to issue stock to undertake the project and issue costs are $800,000 what is the project's APV?
A. - $2.56 million
B. - $1.86 million
C. $1.46 million
D. $3.19 million
E. $2.93 million
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
2nd Edition
0471111864, 978-0471111863
