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Assume ABC Company has a capital structure as follows: Debt: $30 billion Equity: $300 billion Information on the cost of capital is as follows: Risk-free

Assume ABC Company has a capital structure as follows: Debt: $30 billion Equity: $300 billion Information on the cost of capital is as follows: Risk-free rate= 0.5% Expected market return= 3.5% Beta= 0.91 Yield-to-maturity of debt=0.6% Coupon rate=0.7% (semi-annual) ABC Company is considering investing in a new plant that will save the company $3 billion over each of the first two years, and then $1 billion each year thereafter. The taxable investment (at time 0) is $15 billion. What is the NPV of this project?

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