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    Capital Budgeting Analysis: Expected NPV, Value of debt, equity

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    Capital budgeting assignment: Calculate the expected value of the company's debt in one year with and without the expansion based on values in Excel spreadsheet. The answers are to go in the gray cells along with the formulas showing how the answer was derived.

    Probability "Without expansion" "With expansion"

    Recession 0.30 $11,000,000 $13,000,000
    Normal 0.50 $17,500,000 $24,000,000
    Expansion 0.20 $22,500,000 $28,500,000

    Face value of debt $14,000,000
    Cost of expansion $4,500,000

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    https://brainmass.com/business/net-present-value/capital-budgeting-analysis-expected-npv-value-debt-equity-438575

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    Probability "Without expansion" "With expansion"

    Recession 0.30 $11,000,000 $13,000,000
    Normal 0.50 $17,500,000 $24,000,000
    Expansion 0.20 $22,500,000 $28,500,000

    Face value of debt ...

    Solution Summary

    This solution provides a capital budgeting assessment on the given information.

    $2.19

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