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A Toronto ﬁRm Is Considering a New Project Which Requires

question 163

question 163

Multiple Choice

A Toronto ﬁrm is considering a new project which requires the purchase of $250,000 of new equipment. The net present value of the project is $100,000. 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 Toronto ﬁrm is considering a new project which requires the purchase of $250,000 of new equipment. The net present value of the project is $100,000. 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) $6.86 B) $7.94 C) $8.00 D) $8.08 E) $8.76

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