Question: 1.Timco is considering project A. Project A will cost 23000. It should provide after tax cash inflows of 5000 per year for the next 6

1.Timco is considering project A. Project A will cost 23000. It should provide after tax cash inflows of 5000 per year for the next 6 years. The cost of funds is 10%. Find the IRR. Should Timco buy it?

2. Project Q costs 190. It provides inflows of 130 per year for three years. The cost of funds is 6%. Find the equivalent annual annuity value needed to compare it to a six year project.

3. Let Timco use a capital structure that is 35% debt and 65% equity, The firm can borrow at 6%. The tax rate is 40%. Let the firm beta be 1.9, the market return 14%, and the risk free rate 2%. Find the WACC.

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