A firm's investments cost $100,000 and are expected to return $118,000 before taxes at the end of 1 year. The firm is financed with $30,000 debt at an expected rate of 8%. The firm pays taxes at the marginal rate of 40%, and the appropriate cost of capital is 12%.
-Refer to the information above. What is the NPV of the firm if it is all equity financed?

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The Answer of A firm's investments cost $100,000 and are expected to return $118,000 before taxes at the end of 1 year. The firm is financed with $30,000 debt at an expected rate of 8%. The firm pays taxes at the marginal rate of 40%, and the appropriate cost of capital is 12%.
-Refer to the information above. What is the NPV of the firm if it is all equity financed?

A Firm's Investments Cost $100,000 and Are Expected to Return