Renfro Construction is evaluating a new, non-scale-enhancing…

Questions

Renfrо Cоnstructiоn is evаluаting а new, non-scale-enhancing project. The project has an initial cost of $[IC0],000. It will not only increase the corporation's revenues by $[REV0],000, but also their cash costs by $[COST0],200 every year forever. They assume that it will not affect the corporation's depreciation expense. From an analysis of comparable firms, the appropriate unlevered beta was determined to be [BetaU].  If Renfro accepts the project, they will finance it with a debt-equity ratio of [BS]. Their debt is risk-free, yielding the risk-free rate of [RF0] percent. If the market risk premium is [MRP0] percent and Renfro's tax rate is 21 percent, what is the NPV of the project? (Enter your answer in dollars, rounded to the nearest $0.01. E.g., for $123,456.789, enter 123456.79)

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