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Answers are correct. Only need C: after tax salvage value and E: Net present value & Internal rate of return Suppose you have been hired

Answers are correct. Only need C: after tax salvage value and E: Net present value & Internal rate of return image text in transcribed
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Suppose you have been hired as a financial consultant to Defense Electronics, setting up a manufacturing plant o Inc. (DEl), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs) The company is looking at overseas to produce a new Ine of RDSS. This will be a fve year projoct. The company bought some land three years ago for $7 milion in anbicipason of using it as a toxic dump sit for waste chemicals, but it buit a million after taxes. The company wants to build its new manufacturing plant on this land: the plant will cost $13.16 million to build. The following market data on DEr's secunties are current Debt Common sfook: 754,000 shares outslanding, seling for $94 40 per share, the beta is 1.24 Preferred stock: 35,400 shares of 6.4 percent preferred slock outstanding, selling for $82 40 per share Market7.2 DErs tax rate is 40 percent. The project requires $845,000 in initial net working capital investment to get operational andheden als instead. If the land were so dto ay th et prone s ou d be S7 64 minane tam hteyen the land ab -ot 5734 45,400 7 2 percent coupon bonds outstanding. 18 years to maturity seling for 94 6 percent of par, the bonds have a $1,000 par value each and make semiannual peyments 7.2 percent expected market risk premium,5.4 percent risk-free rae

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