What is the NPV of investment

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Reference no: EM132071521

The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown here:

Stock price $ 73

Number of shares 40,000

Total assets $ 7,600,000

Total liabilities $ 2,200,000

Net income $ 440,000

MHMM is considering an investment that has the same PE ratio as the firm. The cost of the investment is $800,000, and it will be financed with a new equity issue. The return on the investment will equal MHMM’s current ROE.

What is the NPV of this investment?

Reference no: EM132071521

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