Question 40 (1 point)

A project lasts two years. The initial cost is $ 1,000,000 and the expected cash flow is $ 750,000. The cost of capital (which serves as the discount rate) is 10%. The cost of debt RD = 8% and the corporate tax rate is assumed to be 50%. The company is indebted up to 50% of the initial investment to finance the project. What is the VANA of this project?

Options for question 40:

$ 337,318.1875

$ 412,511.7841

$ 219,875.5852

325 $ 158.5362

$ 415,265.5612

Question 41 (0.5 points)

Using the NPV method (VRA), cash flows to common shareholders are discounted using the after-tax weighted average cost of capital.

Options for question 41:

True

False