Omicron plc, an all-equity company, is investing in a project which will deliver a net present...

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Omicron plc, an all-equity company, is investing in a project which will deliver a net present value of £10m. Omicron is planning to finance the project by borrowing £75m at a rate of 15%. The costs of issuing the debt are £1.5 million. The debt will last as long as the project (8 years). Spark pays corporation tax of 17%. What is the adjusted present value (APV) of the project? Omicron plc, an all-equity company, is investing in a project which will deliver a net present value of £10m. Omicron is planning to finance the project by borrowing £75m at a rate of 15%. The costs of issuing the debt are £1.5 million. The debt will last as long as the project (8 years). Spark pays corporation tax of 17%. What is the adjusted present value (APV) of the project?

Answer rating: 100% (QA)

The Adjusted Present Value APV is a valuation method that considers the value of a project by incorp... View the full answer