A project will give a one-time cash flow of $20,000 after one year.If the project risk requires a return of 10%,what is the levered value of the firm with perfect capital markets?
A)$18,182
B)$20,000
C)$19,000
D)more information needed

Question

Quizplus · Accepted Answer

The levered value of the firm is the present value of the future cash flow. The present value is calculated as $20,000 / (1 + 0.10) = $18,182.

A Project Will Give a One-Time Cash Flow of $20,000