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Apollo Inc has undertaken a project with the following data projected for the next year. Sales $120,000 Costs (excluding depreciation) $36,000 Depreciation $5,000 Interest $2,000

Apollo Inc has undertaken a project with the following data projected for the next year.

Sales $120,000
Costs (excluding depreciation) $36,000
Depreciation $5,000
Interest $2,000
Capital Expenditures $50,000
Change in net working capital $2,000
Marginal tax rate 25%

What is the unlevered net income (UNI) of the project?

Group of answer choices

$50,000

$63,000

$79,000

$59,250

What is the free cash flow generated by the project?

Group of answer choices

$22,000

$12,250

$55,000

-$33,000

Apollo issues stock (i.e., equity) to pay for 60% of the project. Apollo's required return on equity is 12%. The rest of the financing is in the form of a loan with a 6% interest rate. What is Apollo's weighted average cost of capital?

Group of answer choices

9%

10.26%

6%

9.6%

If the free cash flows of the project are expected to grow at 2% in perpetuity, what is the value of Apollo's project?

(Remember the data provided for Apollo are next year's forecasts)

Group of answer choices

$178,500

$11,238

$136,111

$175,000

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