A firm is proposing to undertake a scale expansion. It would cost $25 million and produce an expected cash flow of $5 million a year in perpetuity before it is taxed at the corporate rate of 34%. The firm is financed 30% by debt. The expected return on the firm's equity is 20% and the interest rate on its debt is 10%. What is the NPV of the project using the weighted average cost of capital?

If you do not know the answer to a question you see, what should you do? a. Find the answer on the internet, copy it and paste it in the answering window so that students get the help they need b. Exit the answering window immediately, and log in the next day to view the next question c. Skip the question under "I need more information" category and move onto the next question d. Skip the question under "I don't have the subject knowledge" category and move onto the next question Answer U A B