Question: Can you help me with the question below? Question 2 (25 marks) (a) An investment has an initial cash outflow of RM210,000 for fixed assets

Can you help me with the question below?

Can you help me with the question below? Question
Question 2 (25 marks) (a) An investment has an initial cash outflow of RM210,000 for fixed assets that will be depreciated straight-line to zero over 4 years, which is the life of the project. The sales price is set at RM19.95 a unit, the annual fixed costs are RM237,000, and the variable cost per unit is RM8.87. The tax rate is 22 percent and the discount rate is 11 percent. Compute the sales quantity per year that the investment will break even on a financial basis. (10 marks) (b) Peter's Audio has a yield to maturity on its debt of 7.8 percent, a cost of equity of 12.4 percent, and a cost of preferred stock of 8 percent. The firm has 105 shares of common stock outstanding at a market price of RM22 a share. There are 25 shares of preferred stock outstanding at a market price of RM45 a share. The bond issue has a total face value of RM1,500 and sells at 98 percent of face value. If the tax rate is 21 percent, compute the weighted average cost of capital assuming all interest is tax deductible. (10 marks)

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