Use the information for the question(s)below.
Aardvark Industries is considering a project that will generate the following free cash flows: You are also provided with the following market value balance sheet and information regarding Aardvark's cost of capital:
-Suppose that to fund this new project,Aardvark borrows $120 with the principal to be paid in three equal installments at the end each year.The present value of Aardvark's interest tax shield is closest to:
A)$5.15.
B)$5.00.
C)$5.90.
D)$5.25.

Question

Use the information for the question(s)below.
Aardvark Industries is considering a project that will generate the following free cash flows:  You are also provided with the following market value balance sheet and information regarding Aardvark's cost of capital: 
-Suppose that to fund this new project,Aardvark borrows $120 with the principal to be paid in three equal installments at the end each year.The present value of Aardvark's interest tax shield is closest to:
A)$5.15. 
B)$5.00. 
C)$5.90. 
D)$5.25.

Quizplus · Accepted Answer

The Answer of Use the information for the question(s)below.
Aardvark Industries is considering a project that will generate the following free cash flows:  You are also provided with the following market value balance sheet and information regarding Aardvark's cost of capital: 
-Suppose that to fund this new project,Aardvark borrows $120 with the principal to be paid in three equal installments at the end each year.The present value of Aardvark's interest tax shield is closest to:
A)$5.15. 
B)$5.00. 
C)$5.90. 
D)$5.25.

Use the Information for the Question(s)below