Question: Please round answer to 2 decimal places Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the
Please round answer to 2 decimal places
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project: The project will last 5.00 years with an annual cash flow of $40.00 million. The project will require an initial investment of $140.00 million The firm must determine the cost of capital to evaluate the project. (The project is within the firm's normal activities) Ramblin Wreck, Inc. Financial Data: STOCK DATA: Current Price Per Share # of Shares Book Value BOND DATA: $28.00 2.00 million $50 million Current Price Per Bond # of bonds Annual Coupon Rate Face Value Per Bond Maturity $929.00 20,000.00 8.00% $1,000 10 years The risk free rate in the economy is currently 2.00%, while investors have a market risk premium of 7.00%. Ramblin Wreck, Inc. has a beta of 1.46. The tax rate is 36.00% What is the NPV of the project? (express in millions, so 1000000 would be 1.00)
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