Question: Consider a project lasting one year only. The initial outlay is $1,800 and the expected inflow is $2,000. The opportunity cost of capital is r

Consider a project lasting one year only. The initial outlay is $1,800 and the expected inflow is $2,000. The opportunity cost of capital is r = 0.19. The borrowing rate is rD = 0.09, and the tax shield per dollar of interest is Tc = 0.35.

a. What is the projects base-case NPV? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

b.	What is its APV if the firm borrows 38% of the projects required investment?(Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

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