A firm will give a one-time cash flow of $21000 after one year. If the project risk requires a return of 8%, what is the levered value of the firm with perfect capital market OA $19,444 OB. $23,333 OC. $15,556 OD. more information needed

A firm will give a one-time cash flow of $21000 after one year. If the project risk requires a return of 8%, what is the levered value of the firm with perfect capital market OA $19,444 OB. $23,333 OC. $15,556 OD. more information needed

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

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Concept explainers

Cash Flow Statement Analysis

A company's cash flow is the movement of its cash inflows and cash outflows. A cash flow statement is prepared to determine changes in an organization's cash position. A cash flow statement shows how much money was generated and spent on the business during the fiscal year. The cash flow analysis is a method of analyzing an organization's investing, financing, and operating activities. A cash flow statement reveals an organization's liquidity and solvency, as well as its ability to change cash flows in the future. It eliminates the other effects of accounting methods by improving the comparability of different organizations' operational performance.

Question

A firm will give a one-time cash flow of $21000 after one year. If the project risk requires a return of 8%, what is the levered value of the firm with perfect capital markets?
OA. $19,444
OB. $23,333
OC. $15,556
D. more information needed

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