Question: A project costs $2 million and has a base-case NPV=0. If the firm decides to invest, it has to raise $800,000 by a stock issue.

A project costs $2 million and has a base-case NPV=0. If the firm decides to invest, it has to raise $800,000 by a stock issue. Issue costs are 10% of the net proceeds. What is the APV of the project?

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