Retlaw Corporation (RC) manufactures time-series photographic equipment. It is currently at its target debt - equily ratio of 0.78. It's considering building a new $42 million manufacturing facility. This new plant is expected to generate after- tax cash flows of $8.2 million in perpetuity. The company raises all equity from outside financing. There are three finanding options: A new issue of common stock: The flotation costs of the new common stock would be 8% of the amount ralsed. The required refurn on the company's new equity is 16%. A new issue of 20 - vear bonds: The flotation costs of the new bonds would be 4% of the proceeds. If the company issues these new bonds at an annual coupon rate of 8.0%, they will sell at par. Increased use of accounts payable financing: Because this financing is part of the company's ongoing dally business, it has no flotation costs, and the company assigns it a cost that is the same as the overall firm WACC. Management has a target ratio of accounts payable to long-term debt of 0.170. (Assume there is no difference between the pre-tax and after-tax accounts payable cost. What is the NPV of the new plant? Assume that RC has a 40% tax rate. (Enter the onswer in dollors. Do not round intermediate colculotions. Round the WACC percentoge to 2 decimal places. Round the final answer to 2 decimal ploces. Omit $ sign in your response) NPV $ Retlaw Corporation (RC) manufactures time-series photographic equipment. It is currently at its target debt-equity ratio of 0.78. It's considering building a new $42 million manufacturing facility. This new plant is expected to generate after-tax cash flows of $8.2 million in perpetuity. The company raises all equity from outside financing. There are three financing options: 1. A new issue of common stock: The flotation costs of the new common stock would be 8% of the amount raised. The required return on the company's new equity is 16%. 2. A new issue of 20-year bonds: The flotation costs of the new bonds would be 4% of the proceeds. If the company issues these new bonds at an annual coupon rate of 8.0 %, they will sell at par. I 3. Increased use of accounts payable financing: Because this financing is part of the company's ongoing daily business, it has no flotation costs, and the company assigns it a cost that is the same as the overall firm WACC. Management has a target ratio of accounts payable to long-term debt of 0.170. (Assume there is no difference between the pre-tax and after-tax accounts payable cost.) What is the NPV of the new plant? Assume that RC has a 40% tax rate. (Enter the answer in dollars. Do not round intermediate calculations. Round the WACC percentage to 2 decimal places. Round the final answer to 2 decimal places. Omit $ sign in your response.) NPV

Landman Corporation (LC) manufactures time series photographic equipment. It is currently at its target debt-equity ratio of .80 and is considering building a new $45 million manufacturing facility. This new plant is expected to generate aftertax cash flows of $5.7 million a year in perpetuity. The company raises all equity from outside financing. There are three financing options: 1. A new issue of common stock: The flotation costs of the new common stock would be 7.5 percent of the amount raised. The required return on the company's new equity is 14 percent. 2. A new issue of 20-year bonds: The flotation costs of the new bonds would be 5 percent of the proceeds. If the company issues these new bonds at an annual coupon rate of 8 percent, they will sell at par. 3. Increased use of accounts payable financing: Because this financing is part of the company's ongoing daily business, it has no flotation costs, and the company assigns it a cost that is the same as the overall firm WACC.…

Nikul

Mansuk

Landman Corporation (LC) manufactures time series photographic equipment. It is currently at its target debt-equity ratio of 75. It's considering building a new $41 million manufacturing facility. This new plant is expected to generate aftertax cash flows of $5.3 million in perpetulty. The company raises all equity from outside financing. There are three financing options: 1. A new issue of common stock. The flotation costs of the new common stock would be 7.1 percent of the amount raised. The required return on the company's new equity is 15 percent. 2. A new issue of 20-year bonds: The flotation costs of the new bonds would be 2.7 percent of the proceeds. If the company issues these new bonds at an annual coupon rate of 5.7 percent, they will sell at par. 3. Increased use of accounts payable financing. Because this financing is part of the company's ongoing daily business, it has no flotation costs and the company assigns it a cost that is the same as the overall firm WACC.…

Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently at its target debt-to-equity ratio of 0.56. It is considering building a new $62 million manufacturing facility. This new plant is expected to generate after-tax cash flows of $7.9 million a year in perpetuity. The company raises all equity from outside financing. The required financing will be met by the following: 1. A new issue of common stock. The flotation costs of the new common stock would be 9 percent of the amount raised. The required return on the company's new equity is 13 percent. 2. A new issue of 25-year bonds. The flotation costs of the new bonds would be 5 percent of the proceeds. If the company issues these new bonds at an annual coupon rate of 9 percent, they will sell at par. 3. Increased use of accounts payable financing. Because this financing is part of the company's ongoing daily business, it has no flotation costs, and the company assigns it a cost that is the same…

Raghubhai

Vijay

Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently at its target debt-equity ratio of .66. It’s considering building a new $65.6 million manufacturing facility. This new plant is expected to generate aftertax cash flows of $7.45 million in perpetuity. There are three financing options:   a. A new issue of common stock: The required return on the company’s new equity is 15.2 percent. b. A new issue of 20-year bonds: If the company issues these new bonds at an annual coupon rate of 7.1 percent, they will sell at par. c. Increased use of accounts payable financing: Because this financing is part of the company’s ongoing daily business, the company assigns it a cost that is the same as the overall firm WACC. Management has a target ratio of accounts payable to long-term debt of .12. (Assume there is no difference between the pretax and aftertax accounts payable cost.)   If the tax rate is 21 percent, what is the NPV of the…

Landman Corporation (LC) manufactures time series photographic equipment. It is currently at its target debt-equity ratio of .72. It's considering building a new $66.2 million manufacturing facility. This new plant is expected to generate aftertax cash flows of $7.87 million in perpetuity. There are three financing options: a. A new issue of common stock. The required return on the company's new equity is 15.4 percent. b. A new issue of 20-year bonds: If the company issues these new bonds at an annual coupon rate of 7.1 percent, they will sell at par. c. Increased use of accounts payable financing: Because this financing is part of the company's ongoing daily business, the company assigns it a cost that is the same as the overall firm WACC. Management has a target ratio of accounts payable to long- term debt of .09. (Assume there is no difference between the pretax and aftertax accounts payable cost.) If the tax rate is 22 percent, what is the NPV of the new plant? Note: A negative…