### Considering perpetual project

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##### Reference no: EM131185540

Dexter & Daughter are considering a perpetual project which will produce annual cash inflows from sales of \$126,000 and annual cash costs of \$87,500. The initial cost of the project is \$134,000. The firm has a 34 percent tax rate and an unlevered cost of capital of 15 percent. The firm has a policy of financing 45 percent of the initial cost of each new project with debt. What is the adjusted present value of this project?

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