Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Waterdeep Adventure Travel has an unlevered cost of equity of 11.2%, and a cost of debt of 7.2%. Their tax rate is 20%, and they maintain a capital structure of 42% debt and the rest equity. They are considering giving cave exploration tours to their menu of adventure vacations. Buying the needed equipment would cost $86,130, and would bring in $27,388 one year from today, and $84,798 two years from today. What is the NPV of this project, using the WACC method, if they invest today? Answer is -10,456.773. How do I get there
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Transcribed Image Text:Waterdeep Adventure Travel has an unlevered cost of equity of 11.2%, and a cost of debt of 7.2%. Their tax rate is 20%, and they maintain a capital structure of 42% debt and the rest equity. They are considering giving cave exploration tours to their menu of adventure vacations. Buying the needed equipment would cost $86,130, and would bring in $27,388 one year from today, and $84,798 two years from today. What is the NPV of this project, using the WACC method, if they invest today? Answer is -10,456.773. How do I get there
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