Consider a Project of the Cornell Haul Moving Company,the Timing

question 43

Multiple Choice

Consider a project of the Cornell Haul Moving Company,the timing and size of the incremental after-tax cash flows (for an all-equity firm) are shown below in millions: The firm's tax rate is 34 percent; the firm's bonds trade with a yield to maturity of 8 percent; the current and target debt-equity ratio is 2; if the firm were financed entirely with equity,the required return would be 10 percent. Using the APV method,what is the value of this project to an all-equity firm?

• A)−$46,502,288.10
• B)$12,494,643.75
• C)$36,580,767.55
• D)−$67,163,445.12

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Definitions:

Cell Wall

Cellular structure that surrounds a plant, protistan, fungal, or bacterial cell and maintains the cell’s shape and rigidity; composed of polysaccharides.

Transformation

In genetics, a process by which the genetic material carried by an individual cell is altered by the incorporation of foreign DNA from its surroundings.

Sex Pilus

A thin, tube-like structure used by some bacteria to transfer genetic material to another bacterium during conjugation.

Circular Chromosome

A type of chromosome that is formed in a circular shape, commonly found in bacteria and some archaea.