(see the example in lecture notes 8) apv co. has a project that will gross $1 million per year, with costs of $700,000 per year and an initial investment of $1.02 million. the discount rate is 20% (all-equity), and the corporate tax rate for the project is 34%. apv, co. has decided to fine the project partially by a $200,000 debt, which carries an interest rate of 10% (a) what is the value of the project if apv uses all-equity finance? what is the value of the project if apv according to the current structure of finance?
