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The Alto Horns Corp. is planning on introducing a new line of clarinets. The expected operating income is $ 9 0 0 , 0 0

The Alto Horns Corp. is planning on introducing a new line of clarinets. The expected operating income is $900,000. The unlevered cost of equity is 15%. The firm plans to use $1,000,000 of 10% interest perpetual debt. Assume depreciation, net working capital, and investment cash flows are 0. The corporate tax rate is 20%. Which of the following represents the correct annual cash flows to be used under the WACC method?

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