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The XiaXia Corporation is a company whose sole assets are $ 1 0 0 comma 0 0 0 1 0 0 , 0 0 0
The XiaXia Corporation is a company whose sole assets are $ comma in cash and three projects that it will undertake. The projects are riskfree and have the following cash flows: LOADING...
XiaXia plans to invest any unused cash today at the riskfree interest rate of In one year, all cash will be paid to investors and the company will be shut down.
a What is the NPV of each project? Which projects should XiaXia undertake and how much cash should it retain?
b What is the total value of XiaXias assetsprojects and cash today?
c What cash flows will the investors in XiaXia receive Based on these cash flows, what is the value of XiaXia today
d Suppose XiaXia pays any unused cash to investors today, rather than investing it What are the cash flows to investors in this case? Based on these cash flows, what is the value of XiaXia today
e Explain the relationship in your answers to parts bc and d
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