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  3. a project has the following cash flows: cf_0=-6m;

A project has the following cash flows: CF_0=-6m; CF_1=CF_2 =CF_3=CF_4 =2.5m. Tax rate = 20%,...

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Accounting

A project has the following cash flows: CF_0=-6m; CF_1=CF_2 =CF_3=CF_4 =2.5m. Tax rate = 20%, r_U=10%, r_D=8%, D/E ratio =1. What is the r_L in %?

  • A. 11.58

  • B. 11.50

  • C. 11.00

  • D. 11.60

A project has the following cash flows: CF_0=-6m; CF_1=CF_2 =CF_3=CF_4 =2.5m. Tax rate = 20%, r_U=10%, r_D=8%, D/E ratio =1. What is the initial unlevered cash flow in $ million?

  • A. -4

  • B. -3

  • C. -6

  • D. 0

A project has the following cash flows: CF_0=-6m; CF_1=CF_2 =CF_3=CF_4 =2.5m. Tax rate = 20%, r_U=10%, r_D=8%, D/E ratio =1. What is the NPV in $ million?

  • A. 1.724

  • B. 1.742

  • C. 1.568

  • D. 1.658

A project has the following cash flows: CF_0=-6m; CF_1=CF_2 =CF_3=CF_4 =2.5m. Tax rate = 20%, r_U=10%, r_D=8%, D/E ratio =1. What is the APV (adjusted present value) in $ million?

  • A. 1.0

  • B. 1.2

  • C. 1.1

  • D. .9

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