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UNT Inc is undertaking a $10,000,000 project that will generate $2.5M of yearly after-tax cash flows. Assume the project
Posted: Fri Jul 01, 2022 7:50 am
by answerhappygod
- Unt Inc Is Undertaking A 10 000 000 Project That Will Generate 2 5m Of Yearly After Tax Cash Flows Assume The Project 1 (22.56 KiB) Viewed 37 times
UNT Inc is undertaking a $10,000,000 project that will generate $2.5M of yearly after-tax cash flows. Assume the project's IRR is 15%. If the firm finances the project with only equity, the cost of capital will be 20% and the NPV will be negative. However, if UNT finances the project with a mix of debt and equity, the cost of capital will be 10% and the NPV will be positive. This change to the NPV of the project has what effect on the project's IRR? Multiple Choice not enough information to answer. Decreases the IRR No effect Increases the IRR