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Part 1 / Attempt 1 / 1 You are considering a project that is partially financed with debt in the amount of $ 5 3
Part Attempt You are considering a project that is partially financed with debt in the amount of $ The project will last years. Over each of the next three years, the debt will remain $ and only the interest will be paid ie the debt is not amortizing or being paid down.The cost the debt is rd per year.The corporate tax rate T What is the present value of the tax shields attributable to the financing of this project, assuming that the proper discount rate for the tax shields is the cost of debt rdTechnical note: At the end of year the project will be wound up and all debt will be retired, so there are no financing considerations after year You only need to consider the implications for year t and Also, note that you are only valuing the tax shields, and you don't need to be concerned with the present value of the project itself.
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