Use the Information for the Question(s)below

question 37

Multiple Choice

Use the information for the question(s) below.
Omicron Industries' Market Value Balance Sheet ($ Millions)
and Cost of Capital Omicron Industries' New Project Free Cash Flows (Millions) Assume that this new project is of average risk for Omicron and that the firm wants to hold constant its debt to equity ratio.
-The NPV for Omicron's new project is closest to:

• A)$23.75 million.
• B)$27.50 million.
• C)$28.75 million.
• D)$24.75 million.

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Definitions:

Necessity

A requirement or an indispensable item essential for survival or the functioning of a system.

Price of the Product

The financial cost of acquiring a good or service.

Buyer's Income

Buyer's Income is the total earnings or revenue available to consumers that influences their ability to purchase goods and services.

Burden of a Tax

The economic impact of a tax on the welfare of buyers and sellers, which can affect market behavior and economic efficiency.