Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A firm has a target debt-equity ratio of 0.8. The cost of debt is 8.0% and the cost of equity is 14%. The company has a 32% tax rate.
A project has an initial cost of $60,000 and an annual after-tax cash flow of $22,000 for 7 years. There is no salvage value or net
working capital requirement.
2:12:41
What is the net present value of the project using the WACC?
NOTE: Keep at least 4 decimal places for INTERMEDIATE CALCULATIONS. Enter your FINAL ANSWER to TWO decimal places. Do
NOT include a $ sign,
Numeric Response
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