[See Solution] The company has a 40% tax rate, and its WACC is 10%. What is the projects operating cash flow for the first year (t = 1)? If the project


Question: The company has a 40% tax rate, and its WACC is 10%.

  1. What is the projects operating cash flow for the first year (t = 1)?
  2. If the project would cannibalize other projects by $1 million of cash flow before taxes per year, how would this change your answer to part a?
  3. Ignore part b, if the tax rate dropped to 30%, how would that change your answer to part a?

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