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Suppose BA has a project opportunity. The project has an initial cost of $200 million. The projects expected cashflows are $5.55 million the first year
Suppose BA has a project opportunity. The project has an initial cost of $200 million. The projects expected cashflows are $5.55 million the first year and will grow at 0.012 per year thereafter. BA has an equity cost of capital of 0.073, a debt cost of capital of 0.042, a capital structure of 50% equity & 50% debt, and has a tax rate of 0.21. What is the NPV of this project (in millions)
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