A firm's investments cost $5,000 today and are expected to return $6,250 before taxes at the end of one year.  The firm is financed with $3,000 in debt that promises a return of 18%.  The expected return on the debt is 10%.  The firm pays taxes at a marginal rate of 30%, and the appropriate cost of capital is 12%.  What is the NPV of the firm if it uses 100% equity financing?  Round your answer to the nearest dollar.

Answer rating: 100% (QA)

To calculate the NPV of the firm we need to calculate the pr... View the full answer