Chadstone Technology is planning to invest in a new project that has average risk and the firm wants to keep its debt-to

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Chadstone Technology Is Planning To Invest In A New Project That Has Average Risk And The Firm Wants To Keep Its Debt To 1 (53.44 KiB) Viewed 61 times

Chadstone Technology is planning to invest in a new project that has average risk and the firm wants to keep its debt-to-equity ratio constant. Below you will find the firm's market value balance sheet and cost of capital figures including its corporate tax rate. Assets Liabilities Cost of Capital Cash $0 Debt $300 Debt 5% Other Assets $800 Equity $500 Equity 10% Corporate tax rate 30% And the table below shows the new project's free cash flows. Year 0 1 2 3 Free Cash Flows -$120 $60 $80 $90 The NPV of the firm's new project is closest to: $42.10 $77.25 $99.27 $120.64 None of the above