Question
ANB has a project with $250,000 in depreciation expense each year, no changes in net working capital each year, and initial capital expenditures of $450,000.
ANB has a project with $250,000 in depreciation expense each year, no changes in net working capital each year, and initial capital expenditures of $450,000. The project is expected to last for two years. If the discount rate is 8%, what constant level of unlevered net income results in a NPV of 0 for this project?
BNB has a project with $75,000 in depreciation expense each year, no changes in net working capital each year, and initial capital expenditures of $150,000. The project is expected to last for three years. If the discount rate is 5%, what constant level of unlevered net income results in a NPV of 0 for this project?
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