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27 October 2011, 22:32   Report Abuse

vijay prasanna kumar

Student



[ Scorecard : 32]


GPK Ltd is considering a capital project with the following information

  Capital outlay  - 6 Cr

 Net Cash flow  - 1.5 Cr

Cost of capital - 18%

Interest on loan- 16%

Tax rate - 40%

Floatation Cost - 8%

       The acuistion is to be financed by issuing a 4 cr term loan payable in 5 equal installments starting at the end of 2nd year and issuing a 2 cr ordinary shares. you are required to calculate the NPV and the adjusted NPV...






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