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Now assume that Plastico is considering a project that requires an initial investment of $100 million and has the following projected income statement: This project
Now assume that Plastico is considering a project that requires an initial investment of $100 million and has the following projected income statement: This project is going to be financed at the same debt/equity ratio as the overall firm and is expected to last forever. Assume that there are no principal repayments on the debt (it too is perpetual) Evaluate this project from the equity investors' standpoint. Does it make sense? Evaluate this project from the firm's standpoint. Does it make sense
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