A project will give a one-time cash flow of $20 000 after one year. If the project risk requires a return of 8%, what is the levered value of the firm with perfect capital markets?
A)$18 519
B)$19 882
C)$19 915
D)More information is needed

Question

Quizplus · Accepted Answer

The levered value of the firm can be calculated using the present value formula: Present Value = Future Value / (1 + rate of return)^number of periods. Here, it is $20,000 / (1 + 0.08)^1 = $18,519.

A Project Will Give a One-Time Cash Flow of $20