Problem 12.28 – Defense Electronics, Inc. (DEI)

Essentials of Corporate Finance

Ross, Westerfield, and Jordan

10th Edition and 11th Edition

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Given that the company plans to set up a manufacturing plant to produce new RDSs, the market data on DEI The firm wishes to set up a manufacturing plant to produce radar detection systems (RDS). Compute the cash flow at time 0, the project's discount rate, the aftertax salvage value of the plant, the OCF, and finally, the NPV and IRR of the project.

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