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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Afirm is considering a $5,000 project that will generate an annual cash flow of $1,000 for the next 8 years. The firm has the following financial data:
? Debt/equity ratio is 50%.
? Cost of equity capital is 15%.
? Cost of new debt is 9%.
? Tax rate is 33%.
Determine the project's net present value (NPV) and whether or not to accept it.
< >> NPV Accept / Do not accept
A) -$33 Do not accept
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B) +$33 Accept
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C) +$4,968 Accept
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