A Calgary fiRm Is Considering a New Project Which Requires

question 319

Multiple Choice

A Calgary firm is considering a new project which requires the purchase of $370,000 of new equipment. The net present value of the project is $67,000. The price-earnings ratio of the project
Equals that of the existing firm. What will the new market value per share be after the project is
Implemented given the following current information on the firm?

• A) $11.70
• B) $12.19
• C) $12.49
• D) $13.01
• E) $13.13