Problema firm is considering a 200000 project that will, Ask an Expert

Finance

Problem:

A firm is considering a $200,000 project that will last 4 years and has the following financial data:

After tax cash inflows are expected to be $75000

Target debt/equity ratio is 0.40

The cost of equity is 12%

The cost of debt is 8%

The firm's marginal tax rate is 30%

Required:

Question 1: Calculate weight of debt and weight of common stock

Question 2: Calculate WACC

Question 3: Calculate the project's NPV

Question 4: Calculate the project's IRR

Note: Provide support for your rationale.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162572

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