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Consider a project of the Cornell Haul Moving Company, the timing and size of the incremental after-tax cash flows (for an all-equity firm) are shown
Consider a project of the Cornell Haul Moving Company, the timing and size of the incremental after-tax cash flows (for an all-equity firm) are shown below in millions: 0 1 2 3 4 -$990 +$125 $250 +$375 +$500 The firm's tax rate is 34 percent; the firm's bonds trade with a yield to maturity of 8 percent; the current and target debt-equity ratio is 2; if the firm were financed entirely with equity, the required return would be 10 percent. Using the weighted average cost of capital methodology, what is the NPV? I didn't round my intermediate steps. If you do, you're not going to get the right answer. Multiple Choice -$1,406,301.25 $12,494,643.75 $36.580,767.55 $108,994.618.20
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