Annual sales and annual fixed expenses

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The firm's tax rate is 35%. The company has 2,000,000 in annual sales and annual fixed expenses of 1,100,000 and 500,000 in variable expenses. There was an initial investment in the firm of 1,500,000 which will be depreciated straight line over 10 years. The project is expected to last 10 years. The firm has a capital structure as follows Market value of the bonds is 2,000,000 The market value of the preferred stock is 1,000,000 The marke value of the common stock is 7,00,000 The cost of the preferred stock is 4% , the cost of the common stock is 6% the cost of the bonds is 8% What is the NPV?

Reference no: EM132036996

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