Wind Walker Baked Beans (WIND) is considering a project with an initial cost of $106,000 and...
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Wind Walker Baked Beans (WIND) is considering a project with an initial cost of $106,000 and a single cash inflow occurring one year from today of $139,000. WIND's capital structure consists of 30% debt and 70% equity. Its outstanding bonds have a yield to maturity of 3.6%. WIND has a beta of 1. The risk-free rate is 1.7% and the market risk premium is 12%. If WIND has a tax rate of 22%, what is the net present value of the project? Answer Format: Positive number rounded to 2 decimal places. Wind Walker Baked Beans (WIND) is considering a project with an initial cost of $106,000 and a single cash inflow occurring one year from today of $139,000. WIND's capital structure consists of 30% debt and 70% equity. Its outstanding bonds have a yield to maturity of 3.6%. WIND has a beta of 1. The risk-free rate is 1.7% and the market risk premium is 12%. If WIND has a tax rate of 22%, what is the net present value of the project? Answer Format: Positive number rounded to 2 decimal places.
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To calculate the net present value NPV of the project we need to determine the weighted average cost ... View the full answer
Related Book For
Financial Management Theory and Practice
ISBN: 978-1305632295
15th edition
Authors: Eugene F. Brigham, Michael C. Ehrhardt
Posted Date:
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