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Tom's Ventures uses one-third debt and two-thirds common stock to finance their operations. The after-tax cost of debt is 4.5% and the cost of equity
Tom's Ventures uses one-third debt and two-thirds common stock to finance their operations. The after-tax cost of debt is 4.5% and the cost of equity is 12%. The management of Tom's Ventures is considering a project that they consider to be equally as risky as the overall firm. The project has an initial cash outflow of $10,000. The project is expected to have a single cash inflow of $27,500 at the end of three years. What is the net present value of this project
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