What is the project apv in the following cases

Reference no: EM13302037

A project costs $1 million and has a base-case NPV of exactly zero (NPV=0). What is the project's APV in the following cases.

A) If the firm invests, it has to raise $500,000 by a stock issue. Issue costs are 15% of net proceeds. B) if the firm invests, its debt capacity increases by $500,00. The present value of interest tax shields on this debt is $76,000

Reference no: EM13302037

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