You just finished a capital investment analysis on a $100 million project that has an 8-year life.  The project will generate equal annual operating cash flows of $20 million.  You assumed a $30 million salvage value, $20 million above its adjusted tax basis.  The project has no effect on net working capital.  With a 35% marginal tax rate, the resulting NPV is $7.82 million.  What discount rate (WACC) did you use?

Answer rating: 100% (QA)

To find the discount rate WACC used in the capital investment analysis we can use the formu... View the full answer