Consider a project with free cash flow in one year of $ 137 comma 236 or...

Consider a project with free cash flow in one year of $ 137 comma 236 or $ 177 comma 518, with either outcome being equally likely. The initial investment required for the project is $ 110 comma 000, and the project's cost of capital is 17 %. The risk-free interest rate is 6 %. (Assume no taxes or distress costs.) a. What is the NPV of this project? b. Suppose that to raise the funds for the initial investment, the project is sold to investors as an all-equity firm. The equity holders will receive the cash flows of the project in one year. How much money can be raised in this waylong dashthat is, what is the initial market value of the unlevered equity? c. Suppose the initial $ 110 comma 000 is instead raised by borrowing at the risk-free interest rate. What are the cash flows of the levered equity, and what is its initial value according to M&M? a. What is the NPV of this project? The NPV is $ nothing

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Consider a project with free cash flow in one year of $ 140 comma 416$140,416 or...

Consider a project with free cash flow in one year of $ 140 comma 416$140,416 or $ 160 comma 440$160,440, with either outcome being equally likely. The initial investment required for the project is $ 110 comma 000$110,000, and the project's cost of capital is 23 %23%. The risk-free interest rate is 4 %4%. (Assume no taxes or distress costs.) a. What is the NPV of this project? b. Suppose that to raise the funds for the initial investment, the...

Consider a project with free cash flow in one year of $146,076 or $198,619, with either...

Consider a project with free cash flow in one year of $146,076 or $198,619, with either outcome being equally likely. The initial investment required for the project is $75,000, and the project's cost of capital is 21%. The risk-free interest rate is 6%. (Assume no taxes or distress costs.) a. What is the NPV of this project? b. Suppose that to raise the funds for the initial investment, the project is sold to investors as an all-equity firm. The equity...

A project has a forecasted cash flow of $126 in year 1 and $137 in year...

A project has a forecasted cash flow of $126 in year 1 and $137 in year 2. The interest rate is 5%, the estimated risk premium on the market is 11.5%, and the project has a beta of 0.66. If you use a constant risk-adjusted discount rate, answer the following: a. What is the PV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the certainty-equivalent cash flow in year 1...

Consider a project with free cash flows in one year of $ 133 495 in a...

Consider a project with free cash flows in one year of $ 133 495 in a weak market or $ 199 139 in a strong market, with each outcome being equally likely. The initial investment required for the project is $ 90 000, and the project's unlevered cost of capital is 15 %. The risk-free interest rate is 9 %. (Assume no taxes or distress costs.) a. What is the NPV of this project? b. Suppose that to raise the...

Consider a project with free cash flows in one year of $ 146,335 or $ 179,830...

Consider a project with free cash flows in one year of $ 146,335 or $ 179,830 with each outcome being equally likely. The initial investment required for the project is $92,400, and the project's cost of capital is 20%. The risk-free interest rate is 7%. a. What is the NPV of this project? b. Suppose that to raise the funds for the initial investment, the project is sold to investors as an all-equity firm. The equity holders will receive the...

. Consider a project with free cash flows in one year of $90,000 in a weak econ

. Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy, with each outcome being equally likely. The initial investment required for the project is $80,000, and the project's cost of capital is 15%. The risk-free interest rate is 5%. Sisyphean Bolder Movers Incorporated has no debt, a total equity capitalization of $50 billion, and a beta of 2.0. Included in Sisyphean's assets are $12 billion in cash and risk-free securities. Required: Calculate Sisyphean's enterprise value and unlevered beta considering the fact that Sisyphean's cash is risk-free.

Consider a project with free cash flows in one year of $143,408 in a weak market...

Consider a project with free cash flows in one year of $143,408 in a weak market or $172,483 in a strong market, with each outcome being equally likely. The initial investment required for the project is $75,000, and the project's unlevered cost of capital is 10%. The risk-free interest rate is 10%. (Assume no taxes or distress costs.) a. What is the NPV of this project? b. Suppose that to raise the funds for the initial investment, the project is...

Consider a project with free cash flows in one year of $90,000 in a weak economy...

Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy, with each outcome being equally likely. The initial investment required for the project is $80,000, and the project's cost of capital is 15%. The risk-free interest rate is 5% . The firm has only this project and $80,000 cash. (Assuming perfect capital market) (For Q 1-3, please round your answer to the dollar, write as a number, e.g....

Consider a project with free cash flows in one year of $145,769 or $167,218 with each...

Consider a project with free cash flows in one year of $145,769 or $167,218 with each outcome being equally likely. The initial investment required for the project is $108, 996 and theproject'scost of capital is 22 %.Therisk-freeinterest rate is 7 % .a. What is the NPV of thisproject? b. Suppose that to raise the funds for the initialinvestment,the project is sold to investors as anall-equityfirm. The equity holders will receive the cash flows of the project in one year. How...

Consider a project with free cash flows in one year of $143,429 or $190,456, with each...

Consider a project with free cash flows in one year of $143,429 or $190,456, with each outcome being equally likely. The initial investment required for the project is $106,859, and the project's cost of capital is 23 %. The risk-free interest rate is 6 %. a. What is the NPV of this project? b. Suppose that to raise the funds for the initial investment, the project is sold to investors as an all-equity firm. The equity holders will receive the...

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