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Norris Co. has developed an improved version of its most popular product. To get this improvement to the market, will cost $48 million and will
Norris Co. has developed an improved version of its most popular product. To get this improvement to the market, will cost $48 million and will return an additional $13.5 million for 5 years in net cash flows. The firms debt-equity ratio is .25, the cost of equity is 13 percent, the pretax cost of debt is 9 percent, and the tax rate is 30 percent. What is the net present value of this proposed project?
A) $989,760
B) $1,102,459
C) $1,214,318
D) $1,077,180
E) $1,306,411
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