A project costs 1 million and has a base-case npv of, Ask an Expert

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A project costs $1 million and has a base-case NPV of exactly zero (NPV=0). What is the project's APV in the following cases.

A) If the firm invests, it has to raise $500,000 by a stock issue. Issue costs are 15% of net proceeds. B) if the firm invests, its debt capacity increases by $500,00. The present value of interest tax shields on this debt is $76,000

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9881361

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