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Sampa Video Case Questions/ answer only question 2 please 1.) What is the value of the project using the Adjusted Present Value (APV) approach, assuming
Sampa Video Case Questions/ answer only question 2 please
1.) What is the value of the project using the Adjusted Present Value (APV) approach, assuming the firm raises $750 thousand of debt to fund the project and keeps the level of debt constant in perpetuity? (ANSWERED ALREADY)
$750,000*40% Marginal Corporate Tax Rate = $300,000 Tax Shield $1,228,490+$300,000 =$1,528,490
2.) How does your answer for question 1 change if the firm must pay the debt at the end of the project life (at the end of 2006)?
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