A Project Will Give a One-Time Cash Flow of $20,000

question 28

Multiple Choice

A project will give a one-time cash flow of $20,000 after one year.If the project risk requires a return of 10%,what is the levered value of the firm with perfect capital markets?

• A)$18,182
• B)$20,000
• C)$19,000
• D)more information needed

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Definitions:

Dividend Tax Credit

A tax credit that investors can claim in many jurisdictions for taxes already paid by a corporation on the dividends it distributes to shareholders.

Tax Legislation

Laws and regulations governing the imposition, administration, and enforcement of taxes by the government.

Letters Patent Corporation

A document issued by a government granting rights, privileges, or status to an individual or company, historically used to establish corporations.

Limited Liability Partnership

A partnership where some or all partners have limited liabilities, meaning they are not personally responsible for the debts of the business.