Question: how do I calculate the PV 6) TYP has a target D/E ratio of 25%. The flotation costs for equity is 6% and the flotation
6) TYP has a target D/E ratio of 25%. The flotation costs for equity is 6% and the flotation cost for debt is 4%. TYP is considering a project that will cost $2.8 million. The project will generate after-tax cash flows of $750,000 per year for 6 years. The WACC is 15%. a) What is the NPV of the project without adjusting for flotation costs? (3 marks) N=6,I=15%,PMT=750000,FV=0,PV=$2,838,362.02 NPV of the project =$2,838,362.02$2,800,000=$38,362.02
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