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d. Now assume that ABC Corporation is considering a project that requires an initial investment of $100 million and has the following projected income statement:

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d. Now assume that ABC Corporation is considering a project that requires an initial investment of $100 million and has the following projected income statement: EBIDTA $25 million Interest $ 4 million Taxes $ 6.40 million (Depreciation for the project is expected to be $5 million a year forever.) This project is going to be financed at the same debt/equity ratio as the overall firm and is expected to last forever. Assume that there are no principal repayments on the debt (perpetual). e. Evaluate this project from the equity investors' standpoint. Do you accept the project? f. Evaluate this project from the firm's standpoint. Do you accept the project? Why this NPV is different from the NPV in (e)

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