Multiple Choice
Use the following information to answer the question(s) below.
Rearden Metal is evaluating a project that requires an investment of $150 million today and provides a single cash flow of $180 million for sure one year from now.Rearden decides to use 100% debt financing for this investment.The risk-free rate is 5% and Rearden's corporate tax rate is 21%.Assume that the investment is fully depreciated at the end of the year.
-The NPV of this project using the APV method is closest to:
A) $10 million.
B) $17 million.
C) $42 million.
D) $71 million.
Correct Answer:

Verified
Correct Answer:
Verified
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