Use the Following Information to Answer the Question(s)below

question 95

Multiple Choice

Use the following information to answer the question(s) below.
Taggart Transcontinental is considering a $250 million investment to launch a new rail line.The project is expected to generate a free cash flow of $32 million per year,and its unlevered cost of capital is 8%.Taggart's corporate tax rate is 21%.Taggert has 4 million shares of stock outstanding.
-Assuming that to fund the investment Taggart will take on $250 million in permanent debt and ignoring issuance costs,the NPV of Taggart's new rail line is closest to:

• A)$195 million.
• B)$200 million.
• C)$235 million.
• D)$240 million.

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Definitions:

Punishment

A consequence intended to reduce the occurrence of a particular behavior by applying an unpleasant or negative stimulus following the behavior.

Violence

The use of physical force with the intent to injure, damage, or kill.

Aggression

Behavior that is intended to harm another person and that the other wants to avoid.

Being Too Hot

Experiencing an uncomfortably high body temperature or environmental temperature.