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6. The Green-Way company evaluates a project of ecological sewage-farm. The project is as risky as the company itself . It cost $6 million to establish the sewage-farm which is expected to generate $0.5 million for 15 years. The government using funds from EU can give the company a special loan to finance the project . The interest on that loan is 0% for 15 years. What is APV of econological sewage-farm ? Is it worth knowing that the risk premium is 5%, risk free rate is 2% , Green-way’s beta is 0.4 . You may also want to know that the tax rate is 20% and unsubsidized borrowing rate is 3%.

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