Company has project with an initial after-tax cash savings

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A company has a project with an initial after-tax cash savings of $40,000 at the end of the first year. These savings will increase by 2% annually. The firm has a debt-equity ratio of 1/3, a cost of equity of 16%, a cost of debt of 10%, and a 35% tax rate. The project is equal in risk to the current overall risk of the company. What is the present value of the project? a. $321,906 b. $343,938 c. $355,800 d. $357,021 e. $361,016

Reference no: EM131185194

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