Question: Previous answer given to me by chegg was incorrect and does not account for tax. The rest of info is here 30 percent tax rate

Previous answer given to me by chegg was incorrect and does

Previous answer given to me by chegg was incorrect and does not account for tax. The rest of info is here

not account for tax. The rest of info is here 30 percent

30 percent tax rate and I need the adjusted present value

(b). NBT Ltd plans to invest in a project with three years' life and will finance the initial investment using $3m debt plus $2m equity. NBT will repay $1 million debt at the end of each year until it is fully repaid. Other important information is provided in the table below. Calculate the adjusted present value (APV) of the project. (8 marks) cost of debt Asset beta (unlevered firm beta) Market risk premium Risk free interest rate Free cash flow (unlevered) 8% 1.2 6% 4% $3m 10% 0 PART B: SHORT PROBLEMS (30 Marks) Problem 1 (12 marks) (a). NIT is going to adjust its current Debt/Equity ratio from 1.5 to 2. Using the information in the below, calculate the cost of equity of NIT after the capital restructure. If D/E=1.5 If D/E=2 Cost of debt 6% 6.5% Cost of equity ? 30% 30% Tax rate 012%

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