Algoma Incorporated has a capital structure which is based on 35 % debt, 15 % preferred stock,
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Algoma Incorporated has a capital structure which is based on 35 % debt, 15 % preferred stock, and 50 % common stock. The after-tax cost of debt is 7 %, the cost of preferred is 8 %, and the cost of common stock is 10%. The company is considering a project that is equally as risky as the overall firm. This project has initial costs of $140,000 and cash inflows of $90,000 a year for two years. What is the projected net present value of this project?
Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
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