Suppose a Project Financed Via an Issue of Debt Requires

question 55

Multiple Choice

Suppose a project financed via an issue of debt requires six annual interest payments of $20 million each year.If the tax rate is 30% and the cost of debt is 8%,what is the value of the interest rate tax shield?

• A)$31.35 million
• B)$27.74 million
• C)$23.20 million
• D)$32.64 million
• E)$36 million

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Definitions:

Quality of Labor

Refers to the skill levels, education, training, and productivity of workers within an economy.

Imports Volume

The total quantity of goods and services brought into a country from abroad over a specific time period.

Exports Volume

The total quantity of goods and services a country sells to foreign countries within a specified timeframe.

Economy Size

A measure of the total value of all goods and services produced by a country's economy, often assessed through GDP.