A Firm Has a Project with an NPV of -$52

question 30

Multiple Choice

A firm has a project with an NPV of -$52 million.If it has access to risk-free government financing that can create a permanent annual tax shield of $5 million,what is the APV of the project assuming the risk-free interest rate is 6%?

• A)-52 million
• B)$5 million
• C)$31 million
• D)$83 million

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Definitions:

Deep Processing

A method of learning that involves engaging with the material on a meaningful level, as opposed to shallow or surface-level processing.

Basal Ganglia

Groups of neurons located deep within the cerebral hemispheres involved in the coordination of movement and reward processing.

Explicit Memories

Memories of specific information or events that can be consciously recalled.

Hippocampus

A critical part of the brain located in the medial temporal lobe, important for learning and memory.