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QUESTION 8 You are considering expanding your internet router business. A $10 million dollar investment in equipment would be depreciated straight-line over 5 years. You
QUESTION 8 You are considering expanding your internet router business. A $10 million dollar investment in equipment would be depreciated straight-line over 5 years. You could then produce revenues of $4.4 million per year for 5 years, your variable costs would be $1 million per year, you face a 35% tax rate, and you are all equity financed. The beta of your equity is 1.1, the risk-free rate is 1%, and the expected market return is 8%. What category best fits the NPV for this investment? O Less than or equal to 0. O Greater than 0, less than $500,000. O Greater than or equal to $500,000, less than $1,000,000. O Greater than or equal to $1,000,000, less than $1,500,000. O Greater than or equal to $1,500,000, less than $2,000,000. O Greater than or equal to $2,000,000
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