• Hi, my question is regarding a WACC problem.

A Project will cost $4,819,724 and its expected to earn zero after one year but $3,009,913 at the end of second year and $2,779,333 at the end of third year. your company has borrowings worth $73,789,532 for which the company is paying 7.4% per year interest and the owners for the company have invested a total of $149,815,110.40 and they generally want a return of 15% per year. corporate tax is 37%. is it a good project or not? How many percent return/loss will your company have if you go ahead with this project?

The formula I used to capitulate this was WACC= D/V(Rd)(1-Tc)+E/V(Re)