Tali is considering a new project. The project will generate revenues of $16 million and...
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Tali is considering a new project. The project will generate revenues of $16 million and operating costs of $9,000,000 annually for the next 5 years. Interest expense is $1,000,000 per year. It requires an additional machine that costs $15 million dollars and will be fully depreciated to a zero book value) on a straight?line basis over 5 years. The machine has a salvage value of $2,000,000. Tall's tax rate is 30%. The beta of the project is 1.10. The risk-free return is 5% and the return on the market is 15%. What is the net present value of the project? A. 4,943,129 B. 2,651,124 C.4,657,461 D.2,365,456 E. 2,317,039
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