Question: Maple is considering an expansion project. The project will generate free cash flows of $20M per year in perpetuity, and requires an initial investment of

Maple is considering an expansion project. The project will generate free

Maple is considering an expansion project. The project will generate free cash flows of $20M per year in perpetuity, and requires an initial investment of $180M. Maple has a target Debt/Equity ratio of 3, and faces a tax rate of 30%. At this target debt ratio, the weighted average cost of capital is rwacc = 10%. The firm's cost of debt is 6%. What is the Net Present Value of the project? $9M $20M $31M $36M

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