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Fitzgerald Industries has a new project available that requires an initial investment of $4.6 million. The project will provide unlevered cash flows of $835,000 per
Fitzgerald Industries has a new project available that requires an initial investment of $4.6 million. The project will provide unlevered cash flows of $835,000 per year for the next 20 years. The company will finance the project with a debt-value ratio of .35. The company's bonds have a YTM of 6.8 percent. The companies with operations comparable to this project have unlevered betas of 1.15, 1.08, 1.30, and 1.25. The risk-free rate is 3.8 percent and the market risk premium is 7 percent. The tax rate is 21 percent. What is the NPV of this project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89) NPV Fitzgerald Industries has a new project available that requires an initial investment of $4.6 million. The project will provide unlevered cash flows of $835,000 per year for the next 20 years. The company will finance the project with a debt-value ratio of .35. The company's bonds have a YTM of 6.8 percent. The companies with operations comparable to this project have unlevered betas of 1.15, 1.08, 1.30, and 1.25. The risk-free rate is 3.8 percent and the market risk premium is 7 percent. The tax rate is 21 percent. What is the NPV of this project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89) NPV
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Step: 1
To calculate the NPV Net Present Value of the project for Fitzgerald Industries we need to follow these steps 1 Calculate the projects unlevered cost ...Get Instant Access to Expert-Tailored Solutions
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Step: 3
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