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BC Travel Services is considering a new ten-year project that will generate additional sales revenue ...

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BC Travel Services is considering a new ten-year project that will generate additional sales revenue ...

BC Travel Services is considering a new ten-year project that will generate additional sales revenue of $200,000 per year. The associated costs are $120,000 per year. The project is somewhat riskier than the company's current operations, and hence requires a risk premium of 2%. The company's cost of capital is 12% and marginal tax rate is 40%. What is the present value of the after-tax operating cash flows?

▸ $417,289

▸ $452,018

▸ $250,374

▸ $271,211

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Corporate Finance

Edition: 5^th

Author: Booth

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britt138 Author

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Thanks for your help!!

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Brilliant ツ

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