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Firm UVW has a face debt value of $ 5 5 Million USDs trading at 7 0 % with a pre - tax weighted cost

Firm UVW has a face debt value of $55 Million USDs trading at 70% with a pre-tax weighted cost of 8%. Firm UVW's common equity for the year was valued at $200 Million of USDs and preferred equity for $15 Million of USDs. The Preferred equity rate was calculated to be 20%. However, the common equity was to be calculated using CAPM approach, with a 5% risk free rate and a 5% market risk premium rate, assuming a Beta of 0.9. If the tax rate is 30%, what is Firm UVW s WACC? Continue considering Firm UVW. Suppose Firm UVW is considering investing in a new project of urban development. The cost of the project is $5 Millions of USD. Firm UVW expects that the non-incremental yearly cash flows from the project are $1.5 Million of USD for the next five years; e.g. that is $1.5 Million of USD each year. Using the calculated WACC in the previous question, what is the Net Present Value (NPV) of the project?

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