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problem: A project has a NPV, suppose all equity financing, of 1.5 million dollar. To finance the project, debt is issued with associated flotation costs of $60,000. The flotation costs can be amortized over the project's 5 year life. The debt of 10 million dollar is issued at 10 percent interest, with principal repaid in a lump sum at the end of the fifth year. If the firm's tax rate is 34 percent, compute the project's APV.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M918665

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