Lahoma Enterprises, Inc., needs $15 million to finance a major product development. The project will be financed

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Lahoma Enterprises, Inc., needs $15 million to finance a major product development. The project will be financed from the following sources:

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Lahoma Enterprises’ effective tax rate is 34 percent with taxes paid annually. The stock price is stable. Management determines MARR based on the weighted average cost of capital plus 8 percent (i.e., if the weight average cost of capital is 12 percent, MARR is 20 percent). Determine the appropriate value of MARR for evaluating this project.

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Principles Of Engineering Economic Analysis

ISBN: 9781118163832

6th Edition

Authors: John A. White, Kenneth E. Case, David B. Pratt

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