Calculate wacc and rate of returncapital structure50 debt, Ask an Expert

Accounting

Calculate WACC and Rate of Return

Capital Structure:

50% debt and 50% equity financing
Current cost of debt is 2% above prime (Prime is currently 2.5%)
cost of equity is estimated to be 20%
Marginal tax rate is 37%

Investment:

Equipment that costs $850,000
Installation Fees of $10,000
Updates every year $2,000 (assuming they dont need a update until the end of the first year)

My work:
Capitalizing on the equipment, we have $860,000

Please help me in this Assignment, Expertsmind Experts need ypus Assistance

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9521855

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