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Question: Dexter & Daughter are considering a perpetual project which will produce annual cash inflows from sales of $126,000 and annual cash costs of $87,500. The initial cost of the project is $134,000. The firm has a 34 percent tax rate and an unlevered cost of capital of 15 percent. The firm has a policy of financing 45 percent of the initial cost of each new project with debt. What is the adjusted present value of this project?

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Category:- Basic Finance
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