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An all-equity firm is considering a project that will cost $12 million and last six years. The firm uses straight-line depreciation. The firm's cost of
An all-equity firm is considering a project that will cost $12 million and last six years. The firm uses straight-line depreciation. The firm's cost of unlevered equity is 11.7 percent, the risk-free rate is 4.6 percent, and the tax rate is 21 percent.
If the project will generate revenues minus expenses each year equal to $3.52 million, what is the net present value of the project?
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