Torpedo Co. is considering a new project generating an annual cash revenue of $500,000 in perpetuity. Annual costs are 70 percent of the cash revenue. The initial cost of the investment is $685,000, The tax rate is 34 percent and the unlevered cost of equity is 14.2 percent. The firm is financing $200,000 of the project cost with debt. What is the adjusted present value of the project?

Answer rating: 100% (QA)

To calculate the adjusted present value APV of the project we need to consider the cash flows the co... View the full answer