Antonio's is analyzing a project with an initial cost of $45,000 and cash inflows of $27,000 a
Fantastic news! We've Found the answer you've been seeking!
Question:
Antonio's is analyzing a project with an initial cost of $45,000 and cash inflows of $27,000 a year for 2 years. This project is an extension of the firm's current operations and thus is equally as risky as the current firm. The firm uses only debt and common stock to finance their operations and maintains a debt-equity ratio of 0.8. The pre-tax cost of debt is 9.0 percent and the cost of equity is 12.0 percent. The tax rate is 34 percent. What is the projected net present value of this project?
A) $3,954.14 | |
B) $42,487.20 | |
C) $14,445.65 | |
D) $2,299.17$ E) $1,517.45 |
Related Book For
Intermediate Financial Management
ISBN: 978-1285850030
12th edition
Authors: Eugene F. Brigham, Phillip R. Daves
Posted Date: