Its pre-tax cost of equity is 14 and its pre-tax cost of


AMC has a project that will last 7 years and have an initial investment of $1,400,000. The after tax cash flows are estimated at $315,000 per year. The targeted debt-to-equity ratio of 1.5. Its pre-tax cost of equity is 14%, and its pre-tax cost of debt is 8%. The tax rate is 40%. Solve for NPV.

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Financial Management: Its pre-tax cost of equity is 14 and its pre-tax cost of
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