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You just finished a capital budgeting investment analysis on a ​$209 million project. The​ project's life...

You just finished a capital budgeting investment analysis on a ​$209 million project. The​ project's life is 10 years and it will generate equal annual​ after-tax cash operating cash flows of ​$37.61 million. You assumed a ​$68 million salvage​ value, but the​ project's adjusted tax basis at termination will be ​$93 million. The project would have no effect on net working capital. With a 27​% marginal tax​ rate, the resulting NPV is ​$80.93 million. What cost of capital did you use for the​ analysis? ​ (Percent with​ 1decimal)

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Expert Solution

IF YOU NEED SOLUTION WITH FINANCIAL CALCULATOR, WILL DO THAT ALSO. THIS IS EASY QUESTION, ONLY TRICK IS THAT NPV = 0 WHEN WE ADD NPV TO COST, THEN FIND IRR

jeff jeffy answered 3 months ago
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