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Question
An all-equity firm is analyzing a potential project which will require an initial, after-tax cash outlay of $50,000 and after-tax cash inflows of $6,000 per year for 10 years. In addition, this project will have an after-tax salvage value of $10,000 at the end of Year 10. If the risk-free rate is 6 percent, the return on an average stock is 10 percent, and the beta of this project is 1.50, then what is the project's NPV?
a. $13,210
b. $4,905
c. $7,121
d. u2212$6,158
e. u2212$12,879
Answer
This answer is hidden. It contains 266 characters.
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