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A project has an unlevered NPV of $1.5 million. To finance the project, debt is being issued with associated flotation costs of $60,000. The flotation
A project has an unlevered NPV of $1.5 million. To finance the project, debt is being issued with associated flotation costs of $60,000. The flotation costs can be amortized over the project's 5-year life. The debt of $10 million is being issued at the market interest rate of 10 percent, with principal repaid in a lump sum at the end of the fifth year. If the firm's tax rate is 34 percent, calculate the project's APV.
$1,494,028 88
$1,909,417
$2,441,107
$2,744,334
$2,384,312
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