Determining the adjusted present value of project


Solar Mist Corp. is currently unlevered and has a cost of equity of 18%. The company is contemplating a project that will cost $650 and generate an after tax cash flow of $400 for two years. The company pays taxes at a 40% rate and has a beta of 1.45. If the company abandoned its aversion to debt and partially financed the project with a $350 non-amortizing loan at a 10% interest rate, what would be the adjusted present value of the project?

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Finance Basics: Determining the adjusted present value of project
Reference No:- TGS041320

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