A levered firm has a target capital structure of 30 percent, Ask an Expert

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A levered firm has a target capital structure of 30 percent debt and 70 percent equity. The aftertax cost of debt is 6.5 percent, the tax rate is 34 percent, and the cost of equity is 12.3 percent. The firm is considering a project that is equally as risky as the overall firm. The project has an initial cash outflow of $1.1 million and annual cash inflows of $480,000 at the end of each year for three years. What is the NPV of the project?

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Financial Management, Finance

Category:- Financial Management
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