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the answers as per the key are following and it doesnt match Question 2 ( Capital budgeting ) a ) ( Unlevered ) net income:

the answers as per the key are following and it doesnt match
Question 2(Capital budgeting)
a)(Unlevered) net income: NI0=0, NI1= NI2= NI3=195;
Free cash ows: CF0=775, CF1=345, CF2=370, CF3=710.
b) The expected return on GAP is 17%.
c) The NPV of the project is 233.46. We should undertake it.
d) Unlevered income is now 97.5 and free cash ow 52.5 in years 4 and 5. Free cash ow in
year 3 is 345 instead of 710. The new NPV is 57.4. We would still undertake the project.

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