What is the project adjusted present value

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Reference no: EM131890272

Oliver ASA has an investment beta of 1.3, and the risk-free rate is 4%. The expected return on the market portfolio is 11%, and the corporate tax-rate is 27%. There are no personal taxes. Oliver considers a new 3-year project. The project requires an investment of NOK 8 million. The project will be financed by 40% debt and cost of debt is 5%. The loan is fully repaid in the last year. The company expects an annual after-tax cash flow from this project of NOK 4 million in all 3 years. What is the present value of the project’s tax-shield? What is the project's adjusted present value? This is all the information provided in the text.

Reference no: EM131890272

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