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Bono Inc. is considering a project that costs $10 million but will produce cash inflows of $5.1 million for 3 years. Bono Inc. has a
Bono Inc. is considering a project that costs $10 million but will produce cash inflows of $5.1 million for 3 years. Bono Inc. has a target equity ratio of 60% and a target debt ratio of 40%. The companys cost of equity is 13% and the after tax cost of debt is 6%. What is the NPV of the project? Assume the project has average risk. Show calculations
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