Question 22 (2 points)

A company undertakes a project that would require an initial investment of $ 1,500,000 and whose expected after-tax operating cash flow is $ 250,000 per year for 15 years. The share of debt financing corresponds to 50% of the initial investment. The loan is repayable in a lump sum at the end of year 15 and interest is paid at the end of each year. The company's tax rate is 35%, its pre-tax cost of debt is 12%, and its cost of equity is 14.5%. Calculate the NPV (CMPCAPI)

Options for question 22:

$ 94,948.3177

$ 202,716.1224

$ 206,056,1494

$ 215,564.6251

$ 282,929.9905

Question 23 (1 point)

A company contracts a bond debt of $ 200,000 at the coupon rate of 8% per annum, for a term of 7 years. If the tax rate is 45%. Calculate the present value of the total tax savings related to interest.

Options for question 23:

$ 73,179.0668

$ 37,485.8644

$ 52,302.5625

$ 42,425.6321

$ 35,625.6987