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Please show work. Question 3 O out of 10 points A company is considering expansion into a new market. This will cost $1,500,000. The company
Please show work.
Question 3 O out of 10 points A company is considering expansion into a new market. This will cost $1,500,000. The company estimates this project will have a beta of 1.1. The Rm=10% and the Rf=3%. The Wd is 50% and the cost of equity is 4% and the cost of debt is 5%. The tax rate is 40%. It will generate the following cash flows: Year 1: $400,000 Year 2: $400,000 Year 3: $500,000 Year 4: $250,000 Year 5: $300,000 What is NPV using CAPM? Question 4 10 out of 10 points A company is considering expansion into a new market. This will cost $1,500,000. The company estimates this project will have a beta of 1.1. The Rm=10% and the Rf=3%. The Wd is 50% and the cost of equity is 4% and the cost of debt is 5%. The tax rate is 40%. It will generate the following cash flows: Year 1: $400,000 Year 2: $400,000 Year 3: $500,000 Year 4: $250,000 Year 5: $300,000 What is NPV using WACCStep by Step Solution
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