Question: Problem 1 You are given the following information about a project: i) The project will produce the following free cash flows at the end of

Problem 1 You are given the following information about a project: i) The project will produce the following free cash flows at the end of years one and two: Year Free Cash Flows 1 30,000 25,000 ii) There are no cash flows after the second year. iii) The cost of capital if the project is unlevered is 15%. iv) The cost of debt capital is 4%. v) The project is financed with a two-year loan of 5000. Calculate the rate of return to investors on this project. 2.

Problem 1 You are given the following information about a project: i) The project will produce the following free cash flows at the end of years one and two: Year Free Cash Flows 1 30.000 2 25,000 ii) There are no cash flows after the second year. iii) The cost of capital if the project is unlevered is 15%. iv) The cost of debt capital is 4%. v) The project is financed with a two-year loan of 5000. Calculate the rate of return to investors on this project

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