What is initial market value of the unlevered equity

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Consider a project with free cash flows in one year of S141.727 or $182,901, with each outcome being equally likely The initial investment required for the project is $95,455, and the project's cost of capital is 15%. The interest rate

a. What is the NPV of this project?

b Suppose that to raise the funds for the initial investment, the project is sold to investors as an altequity firm The equity holders will receive the cash flows ofthe project in one year How much money can be raised in this way that is, what is the initial market value of the unlevered equity?

c. Suppose the initial $95,455 is instead raised by borrowing at the risk-free interest rate, What are the cash flows of the levered equity, what is its initial value and what is the initial equity according to MM?

a. What is the NPV ol this project? The NPV is s (Round to the nearest dollar.)

Reference no: EM131580669

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