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14. What is the NPV of the project using the APV methodology? A. $49,613.03 B. $198,469 C. $102,727.55 D. $149,580.12 E. None of the above APV =...

This question was created from Chap018 https://www.coursehero.com/file/7228312/Chap018/

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Why N=10

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14 . What is the NPV of the project using the APV methodology ?"
A. $ 49 , 613. 03
B. $198, 469
C . $102 , 727.55
D. $1 49, 580. 12
E . None of the above
APV = - Cost + Base- case NPV + NPV depreciation tax shield + NPV interest tax shield =
The project does not cost $100 , 000 but rather $98 , 937 . 49 = - $100 , 000 + $1, 062.51
( 100, 000 less the present value of after tax salvage value discounted at Yasser = 12% )
Base - case NPV
NPV depreciation tax shield
NPV interest tax shield
N = 10
PMIT = $6. 800
PMIT = $1, 632
PMIT = $3 3, 000 -
= $20, 000 x . 34
- . 06 X $80, 000 x . 34
25, 000 x ($5 - $3 ) X ( 1 -. 34 )
N = 10
N = 10
V /YR = Passet = 12%/0';`
V/YR = Y'debt = 6%/0';`
I/YR = Y'debt = 6%/0;
PV = $186, 457.36
PV depreciation tax shield*
PV interest tax shield]
$50, 048.59
$12, 01 1 . 66
APV = $149, 580. 12 = _ $98, 937. 49 + $186, 457.36 + $50, 048. 59+ $12, 01 1. 60
Find fact pattern

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