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Please show all your work. Thank you! Project lasts for 5 years; Initial capital spending is $1,250 ; Every year project will bring in an
Please show all your work. Thank you!
Project lasts for 5 years; Initial capital spending is $1,250 ; Every year project will bring in an after-tax cash flow of $380 ; The cost of all equity capital is 15% ; Firm's tax rate is 35%. What is the NPV of this all equity financed project? Suppose firm finances the project with $500 of debt at 9% interest rate. What is annual interest tax shield? Continuing from part b, what is present value of all these years' interest tax shield from this project? (for all parts above, DO NOT ROUND intermediate steps, round and format your answer into ONE decimal, ONLY after you finish all parts, for example: 12.3) Project lasts for 5 years; Initial capital spending is $1,250 ; Every year project will bring in an after-tax cash flow of $380 ; The cost of all equity capital is 15% ; Firm's tax rate is 35%. What is the NPV of this all equity financed project? Suppose firm finances the project with $500 of debt at 9% interest rate. What is annual interest tax shield? Continuing from part b, what is present value of all these years' interest tax shield from this project? (for all parts above, DO NOT ROUND intermediate steps, round and format your answer into ONE decimal, ONLY after you finish all parts, for example: 12.3)Step by Step Solution
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