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Consider a project lasting one year only. The initial outlay is $2,500 and the expected inflow is $2,900. The opportunity cost of capital is r
Consider a project lasting one year only. The initial outlay is $2,500 and the expected inflow is $2,900. The opportunity cost of capital is r = .16. The borrowing rate is rD= .10, and the tax shield per dollar of interest is Tc = .30. (Leave no cells blank - be certain to enter "0" wherever required. A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. What is its APV if the firm borrows 35% of the projects required investment?
Adjusted present value = $
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