Question $6$

Consider a project that requires an Initial outlay of R$35000$ and results In a single cash inflow of R$56$

$367\mathrm{.}50$ atter five years.

Required:

$6\mathrm{.}1.$ If the cost of capital is $8\%,$ what are the project's NPV and PI$?$ Is the project acceptable under

each of these techniques?

$6\mathrm{.}2.$ What is the project's NPV and PI If the cost of capital is $12\%?$ is the project acceptable under

that condition?

$6\mathrm{.}3.$ What is the project's payback period? Does payback make much sense for this project? Why?

Question $7$

$18$ Mark$8$

The Wall Company has $142500$ ordinary shares outstanding that are currently selling at R$28\mathrm{.}63.$ It has

$4530$ bonds outstanding that will not mature for $20$ years. They were issued at a par value of R$1000$

paying a coupon rate of $6\%.$ Comparable bonds now yleld $9\%.$ Wall's R$100$ par value preferred stock

was issued at $8\%$ and Is now ylelding $11\%$;$7,500$ shares are outstanding.

Required:

Develop Wall's market value based capital structure.