Antonios is analysing a project with an initial cost of

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Antonio's is analysing a project with an initial cost of $64,000 and cash inflows of $40,000 a year for 3 years. This project is an extension of the firm's current operations and thus is equally as risky as the current firm. The firm uses only debt and common shares to finance their operations and maintains a debt-equity ratio of 0.45. The pre-tax cost of debt is 7 percent and the cost of equity is 10 percent. The tax rate is 34 percent. What is the projected net present value of this project?

Reference no: EM13596893

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