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Maud'Dib Intergalactic has a new project available on Arrakis. The cost of the project is $33,000...
Maud'Dib Intergalactic has a new project available on Arrakis. The cost of the project is $33,000 and it will provide cash flows of $17,400, $22,300, and $20,000 over each of the next three years, respectively. Any cash earned in Arrakis is "blocked" and must be reinvested in the country for one year at an interest of 2.9 percent. The project has a required return of 7.9 percent. What is the project's NPV?
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jeff jeffy answered 1 year agoRelated Solutions
Maud'Dib Intergalactic has a new project available on Arrakis. The cost of the project is $38,500...
Maud'Dib Intergalactic has a new project available on Arrakis.
The cost of the project is $38,500 and it will provide cash flows
of $21,800, $27,800, and $27,700 over each of the next three years,
respectively. Any cash earned in Arrakis is "blocked" and must be
reinvested in the country for one year at an interest of 3 percent.
The project has a required return of 9 percent. What is the
project's NPV? Multiple Choice $38,454.68 $22,721.86 $41,950.56
$26,288.19 $34,218.64
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an initial investment of $4.8 million. The project will provide
unlevered cash flows of $844,000 per year for the next 20 years.
The company will finance the project with a debt-value ratio of
.25. The company’s bonds have a YTM of 6.5 percent. The companies
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The company will finance the project with a debt-to-value ratio of
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Fitzgerald Industries has a new project available that requires an initial investment of $5.1 million. The...
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unlevered cash flows of $843,000 per year for the next 20 years.
The company will finance the project with a debt-value ratio of .4.
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unlevered cash flows of $835,000 per year for the next 20 years.
The company will finance the project with a debt-to-value ratio of
.3. The company’s bonds have a YTM of 6.2 percent. The companies
with operations comparable to this project have unlevered betas of
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unlevered cash flows of $745,000 per year for the next 20 years.
The company will finance the project with a debt-to-value ratio of
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initial investment of $5.6 million. The project will provide
unlevered cash flows of $785,000 per year for the next 20 years.
The company will finance the project with a debt-to-value ratio of
.4. The company’s bonds have a YTM of 6.6 percent. The companies
with operations comparable to this project have unlevered betas of
1.26, 1.19, 1.41, and 1.36. The risk-free rate is 3.6 percent, and
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an initial investment of $4.8 million. The project will provide
unlevered cash flows of $852,000 per year for the next 20 years.
The company will finance the project with a debt-value ratio of
.25. The company’s bonds have a YTM of 7.3 percent. The companies
with operations comparable to this project have unlevered betas of
1.07, .95, 1.22, and 1.17. The risk-free rate is 4.5 percent and
the market risk premium...
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