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Epiphany Industries is considering a new capital budgeting project that will last for three years.Epiphany plans on using a cost of capital of 12% to evaluate this project.Based on extensive research,it has prepared the following incremental cash flow projections:
-The free cash flow for the first year of Epiphany's project is closest to:
Fair Value
An estimate of the market value of an asset or liability based on current market conditions and willing buyer and seller dynamics.
Held-to-Maturity Debt Securities
Financial instruments that a firm has the intent and ability to hold until they mature, recorded at amortized cost.
Marketable Securities
Financial instruments that are easily convertible to cash and are subject to minimal price risk.
Amortized Cost
The amount at which a financial asset or liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortization using the effective interest method.
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