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Sep/Dec 2019 Okan Co - Project Alpha

Former userFormer user6y ago
Do we assume the 10% given by the question is the ungeared cost of equity? The question itself doesn't mention anything for Project Alpha.
John MoffatJohn MoffatTutor6y ago#1
When using the APV approach, the base case NPV is calculated using the ungeared cost of equity. The question specifically says that "the cost of capital for appraising the base case NPV of Project Alpha is 10%".
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