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Business, 13.03.2021 01:00 kevingilbert1210

is considering an investment project that generates a cash flow of $33,000 next year if the economy is favorable but generates only $12,000 if the economy is unfavorable. The probability of favorable economy is 60% and of unfavorable economy is 40%. The project will last only one year and be closed after that. The cost of investment is $25,000 and the company plans to finance the project with $8,000 of equity and $17,000 of debt. Assuming the discount rates of both equity and debt are 0%. What is the expected cash flow to the company's shareholders if the company invests in the project

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