Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 17
Input Area:
Probability
Without
Expansion
With
Expansion
Low 0.30 22,000,000$ 29,000,000$
Normal 0.50 31,000,000$ 37,000,000$
High 0.20 48,000,000$ 54,000,000$
Face value of debt 26,000,000$
Cost of expansion 5,400,000$
Output Area:
1) Expected value of firm
Without expansion 31,700,000$
2) Value of debt
Without
expansion
With
expansion
Recession 22,000,000$ 26,000,000$
3) Value of equity
expansion
expansion
Recession -$ 3,000,000$
McKenzie Corporation's Capital Budgeting
