ERP, Co. is considering entering a licensing agreement with STAT, Inc. the agreement calls for an initial investment fro

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ERP, Co. is considering entering a licensing agreement with STAT, Inc. the agreement calls for an initial investment fro

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Erp Co Is Considering Entering A Licensing Agreement With Stat Inc The Agreement Calls For An Initial Investment Fro 1
Erp Co Is Considering Entering A Licensing Agreement With Stat Inc The Agreement Calls For An Initial Investment Fro 1 (28.86 KiB) Viewed 10 times
ERP, Co. is considering entering a licensing agreement with STAT, Inc. the agreement calls for an initial investment from ERP of $115.1 million. The 15-year agreement is expected to generate for ERP $13.3 in after-tax annual net cash flow throughout its 15-year life. The risk involved in the licensing agreement suggests a beta 0.60. The market risk premium is assumed to be 8.0% and the risk-free rate is 4.0%, 4 pts a. What is the NPV of the licensing agreement project? b. What is the project's IRR? c. What is the current value of the licensing agreement project?
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