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Can Someone assist me in Solving the Below Value based Controlling Question Remark: Information of previous page is not valid any more. Senior management of
Can Someone assist me in Solving the Below Value based Controlling Question
Remark: Information of previous page is not valid any more. Senior management of a company analyses two projects K1 and K2 which require an identical investment [] of in t=0 and lead to positive cash-flows [ ] in future periods (see table below): Cash flow C1 exceeds the cash flow C2. Both projects can be financed by 100% equity at a rate rE [\% p.a.], by 100% debt at a (aftertax) rate of rD[% p.a.] or by 50% equityl 50% debt at a rate of rw [\% p.a.]. The (after-tax) rate of rD[% p.a.] is smaller than the equity rate re[% p.a.]. Controlling provides the following statements: 1. If one project is financed by 100% equity and the other project by 100% debt, none of the project creates or deletes value. 2. If project K1 is financed by 100% debt (in lieu of 100% equity) its value changes by 7,695% of investment I. 3. If project K2 is financed by 100% equity (in lieu of 100% debt) its value changes by 12,74% of year2-cash flow C2. 4. If project K2 is financed by 50% equity/ 50% debt (in lieu of 100% debt) its value changes by 908,782 e) Please calculate one of the payments of the table: I, C1, or C2 []Step by Step Solution
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