You are evaluating a project which requires Rs.100000 investments and produce Rs.20000 cash flow for 6 years. The cost of equity for all equity firm is 15%. Find the NPV of the project and if NPV is negative, then find at what rate of debt (available at 10%) does this project NPV turn positive? Also, find the cost of capital at that debt level. Assume tax rate to be 25%.

Answer rating: 100% (QA)

To find the NPV of the project we need to calculate the net cash flow generated by the project and d... View the full answer