Question: 1 . 3 7 Will and Ben Ice Cream plan to build a new mixing plant to serve customers in Mexico. Because the company is

1.37

Will and Ben Ice Cream plan to build a new mixing plant to serve customers in Mexico. Because the company is in good financial shape with equity funds returning

11 %

per year, the bank will charge an interest rate of

8 %

per year for the loan. An MARR that is

5 %

over the WACC is required to proceed with the project, which sets the MARR at

14 % .

What percentage of debt financing can the company assume to meet its MARR requirement?

1 . 3 7 Will and Ben Ice Cream plan to build a

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