Problem 18-7 NPV for an All-Equity Company Jiminez, Incorporated, is an all-equity firm. The cost of the company's equity is currently 11.5 percent and the risk-free rate is 4.4 percent. The company is currently considering a project that will cost $11.94 million and last six years. The company uses straight-line depreciation. The project will generate revenues minus expenses each year in the amount of $3.55 million. If the company has a tax rate of 23 percent, what is the net present value of the project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89) Net present value
Problem 18-7 NPV for an All-Equity Company Jiminez, Incorporated, is an all-equity firm. The cost of the company's equity is currently 11.5 percent and the risk-free rate is 4.4 percent. The company is currently considering a project that will cost $11.94 million and last six years. The company uses straight-line depreciation. The project will generate revenues minus expenses each year in the amount of $3.55 million. If the company has a tax rate of 23 percent, what is the net present value of the project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89) Net present value
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Problem 18-7 NPV for an All-Equity Company
Jiminez, Incorporated, is an all-equity firm. The cost of the company's equity is currently
11.5 percent and the risk-free rate is 4.4 percent. The company is currently considering a
project that will cost $11.94 million and last six years. The company uses straight-line
depreciation. The project will generate revenues minus expenses each year in the
amount of $3.55 million. If the company has a tax rate of 23 percent, what is the net
present value of the project? (Do not round intermediate calculations and enter your
answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g.,
1,234,567.89)
Net present value
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