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Cliff Corporation (CC) consists of a single project that produce free cash flows of either $93,000 or $114,000 next year with equally probability. The cost
Cliff Corporation (CC) consists of a single project that produce free cash flows of either $93,000 or $114,000 next year with equally probability. The cost of the project is $80,000 and the projects cost of capital 15%. Assuming that CC funds the project by borrowing $40,000 at 5% interest, then what is the required rate of return on CCs levered equity (round to nearest percent)?
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