Raising fund for company, A company has raised $80 million

Raising fund for company

Reference no: EM1332618

A company has raised $80 million from selling stocks. It wants to take part in a venture that requires $40 million this year, its annual after tax cash flow over the next seven years will be only $325,000. If it does invest in this venture it expects its after-tax cash flow to be minus $10 million annually for the same period. How do you determine if this venture is a good deal when the discount rate is 12 percent?

Reference no: EM1332618

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