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Fawn Craft Supply expects to generate a cash flow of $83,000 next year if the economy booms and $61,000 if it does not. The probability
Fawn Craft Supply expects to generate a cash flow of $83,000 next year if the economy booms and $61,000 if it does not. The probability of a boom is 20 percent. The firm has debt of $78,000 that is due in one year and has a current market value of $70,600. The firm plans to close after this coming year. The current promised pretax return on debt is percent, and the expected pretax return on debt is percent. Multiple Choice O 7.34; -1.76 O 10.48:-176 O 10.48; -8.78 O 9.49:-8.78 O 9.49:-3.14
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