Use the Information for the Question(s)below

question 60

Multiple Choice

Use the information for the question(s) below.
Aardvark Industries is considering a project that will generate the following free cash flows: You are also provided with the following market value balance sheet and information regarding Aardvark's cost of capital:
-Suppose that to fund this new project,Aardvark borrows $120 with the principal to be paid in three equal installments at the end each year.The present value of Aardvark's interest tax shield is closest to:

• A)$5.15.
• B)$5.00.
• C)$5.90.
• D)$5.25.

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Definitions:

Decolonization

The process by which colonies become independent from the colonial powers that control them. This often involves the re-establishment of the indigenous governance and cultural systems that were suppressed by colonial rule.

American Industry

The sector of the U.S. economy concerned with manufacturing and production, historically significant in the country's development and global economic status.

Progressivism

A political and social-reform movement that sought to improve society by addressing issues stemming from urbanization, industrialization, and corruption.