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How do you solve this question? The answer is 124 The following information is available for Omicron Industries. Omicron Industries' Market Value Balance Sheet (3

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How do you solve this question? The answer is 124

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The following information is available for Omicron Industries. Omicron Industries' Market Value Balance Sheet (3 Millions) and Cost of Capital Cost of Assets Liabilities Capital Cash 0 Debt 200 Debt 6% Other Assets 500 Equity 300 Equity 12% TC 35% Omicron Industries New Project Free Cash Flows Year 0 1 2 3 Free Cash Flows ($100) $40 $50 $60 Assume that this new project is of average risk for Omicron and that the rm wants to hold constant its debt to equity ratio. The unlevered value of Omicron's new project is closest to: Select one: a. $126 at b. $25 c.3124 d. $96

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