The firms cost of capital

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The capital budgeting director of Spar Corporation is evaluating a project which costs $280,000, is expected to last for 10 years and produce after-tax cash flows, including depreciation, of $42,500 per year. As soon as the project ends, we will sell the materials for scrape for after-tax cash flows $60,000. The firm's cost of capital is 13 percent. Which of the following answers is most correct?

Reference no: EM13812345

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