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Digital Organics (DO) has the opportunity to invest $1.23million now (t = 0) and expects after-tax returns of $700,000 in t= 1 and $800,000 in t = 2. The project will last for two yearsonly. The appropriate cost of capital is 12% with all-equityfinancing, the borrowing rate is 8%, and DO will borrow $200,000against the project. This debt must be repaid in two equalinstallments of $100,000 each. Assume debt tax shields have a netvalue of $.30 per dollar of interest paid. Calculate the project’sAPV. (Enter your answer in dollars, not millions of dollars. Do notround intermediate calculations. Round your answer to the nearestwhole number.) Adjusted present value
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