Erwin Enterprises has 10 million shares outstanding with a current market price of $10 per share. There is one investment available to Erwin, and its cash fl ows are provided below. Erwin has a cost...

Erwin Enterprises has 10 million shares outstanding with a current market price of $10 per share. There is one investment available to Erwin, and its cash fl ows are provided below. Erwin has a cost of capital of 10 percent. Given this information, determine the impact on Erwin’s stock price and fi rm value if capital markets fully refl ect the value of undertaking the project. Initial Cash Outfl ow = $10,000,000 Year Cash Infl ow 1 $3,000,000 2 $4,000,000 3 $5,000,000 4 $6,000,000 5 $9,800,000