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Use the information below to solve the following questions about Arthur Co., which is about to undergo an 8-year project: Unlevered Cost of Equity 10.0%
Use the information below to solve the following questions about Arthur Co., which is about to undergo an 8-year project:
| Unlevered Cost of Equity | 10.0% |
| Cost of Debt | 6.5% |
| % debt financing | 60% |
| Tax Rate | 35% |
| Target D/E | 1.5 |
| Year | After-tax cash flows for all equity firm |
| 0 | $(12,000,000) |
| 1-7 | $2,000,000 |
| 8 | $3,000,000 |
What is the NPV (all equity) of this project?
What is the NPV of the project using the FTE method?
What is the NPV of the project using the WACC?
What is the APV of this project?
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