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GOGO Services is considering a $250 million investment to launch a new rail line. The project is expected to generate a free cash flow of
GOGO Services is considering a $250 million investment to launch a new rail line. The project is expected to generate a free cash flow of $25 million per year, and its unlevered cost of capital is 8%. GOGO's marginal corporate tax rate is 35%. Assuming that to fund the investment GOGO will take on $250 million in permanent debt and ignoring issuance costs, the NPV of GOGO's new rail line is closest to ...
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