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Consider investment project with projected CFs in the table below. Assuming appropriate discount rate of 10% (all equity financed), would you recommend this investment based

Consider investment project with projected CFs in the table below. Assuming appropriate discount rate of 10% (all equity financed), would you recommend this investment based on NPV and IRR metrics? How these metrics would change if 50% debt financing were used? Cost of debt is 5%, assume to tax shield for the CFs. (Hint: find leveraged NPV and IRR).

Year 0

Year 1

Year 2

Year3

Year 4

Year 5

CFs

-100

15

20

5

100

230

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