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Your company has several running projects that were financed with various types of loans. It would like to start one more project, and finance the
Your company has several running projects that were financed with various types of loans. It would like to start one more project, and finance the purchase of the production equipment when the project starts. The company would like to use the socalled "flow-to-equity approach" to calculate the project's profitability. Select YES if the item needs to be calculated under this approach, and NO if it doesn't. - the NPV of the cash flows - the present value of the annual after-tax profits from the project using the cost of equity for an all-equity company as the discount rate - the levered cost of equity - today's value of the project's annual levered cash flows using the levered cost of equity as the discount rate - part of the initial cost of the project that is not covered by the loan
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