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What the npv of project using the apv method is closest to

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Reference no: EM132791457

Rearden Metal is evaluating a project that requires an investment of $150 million today and provides a single cash flow of $180 million for sure one year from now. Rearden decides to use 100% debt financing for this investment. The risk-free rate is 5% and Rearden's corporate tax rate is 40%. Assume that the investment is fully depreciated at the end of the year.

Problem 1) The NPV of this project using the APV method is closest to:

A) $10 million
B) $13 million
C) $42 million
D) $71 million

Reference no: EM132791457

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