A cattle rancher had average total assets of $2 million and average total liabilities of $500,000 during the preceding year. Her cost of debt for that year was 7 % and she estimates her cost of equity to be 10%. What is her weighted average cost of capital expressed as a percentage?

Calculate the payback period for a dry-bean harvester that requires an average initial cash outlay of $500,000. The after-tax net cash flows from this harvester will be $100,000 during the first year; $75,000 for each of the 2^nd, 3^rd, and 4^th, years; and $60,000 for the 5^th, 6^th, 7^th and 8^th years.

What is the simple rate of return on a peanut shelling business you can buy for $4.0 million that will generate a net income of $250,000?

A 30,000 square foot greenhouse structure costs $500,000 to construct. This structure should earn an after-tax income of $100,000 annual for its expected life of 10 years when it will have no salvage value. The farmers cost of capital is 8 percent. Calculate the net present value.

Answer rating: 100% (QA)

Weighted Average Cost of Capital WACC EV x Re DV x Rd x 1 T Where E market value of the companys equity D market value of the companys debt V total ma... View the full answer