Sunny Corp. is looking into building a project that has the following characteristics: - it is a
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Question:
Sunny Corp. is looking into building a project that has the following characteristics:
- it is a new area of business for Sunny Corp.
-upfront cost is $1,000,000
-$100,000 of revenue for fifteen years comes from the project
-A $1,250,000 loan is available and it has a 5% interest rate. The loan will be paid off in ten years, in one lump sum
Required:
1 . Determine the net present value (NPV) of Sunny Corp.'s potential project, using the weighted average cost of capital (WACC) of that company.
Related Book For
Financial Theory and Corporate Policy
ISBN: 978-0321127211
4th edition
Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri
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