Question
Suppose you borrow $44,000M when financing a gym which cost is at $250,000M. You expect to generate a cash flow of $30,000M at the end
Suppose you borrow $44,000M when financing a gym which cost is at $250,000M. You expect to generate a cash flow of $30,000M at the end of the year if demand is weak, $98,000M if demand is asexpected and $120,000M if demand is strong. The current risk-free interest rate is 6% (risk of debt) and there's a 10% risk premium for the risk of the assets.
what is the NPV?
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Financial Institutions Management A Risk Management Approach
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
8th edition
978-0078034800, 78034809, 978-0071051590
