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How many years will the cash inflow take place

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Question - Suppose you are the only owner of a firm, James Smith Co, a sports ware retail company located in Toronto. You are considering a new investment project that is expected to 82 million dollars to be financed and will return 14.50 million dollars per year in net cash flows. The ratio of debt to equity is 1 to 1. The cost of equity is 13%, the cost of debt is 9%, and the tax rate is 34%.

At least how many years will the cash inflow take place for this project is worthwhile?

Reference no: EM132835827

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