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Iron Makers Inc. is an all equity firm in technology with a beta of .75. It is considering pursuing machine ware. The machine ware project

Iron Makers Inc. is an all equity firm in technology with a beta of .75. It is considering pursuing machine ware. The machine ware project has normal cashflows with an initial cost of 6,850,000 and a payback period of 8 years. The pure-play beta is 1.5. The market risk premium is 10% and the risk-free rate is 3%. Compute the worst case NPV.

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