8. Grove Plowing, Inc., is considering investing in a new snowplow truck costing

$30,000. The truck is Likely to provide a cash return after taxes of $10,000 per year for 6 years. The unlevered cost of equity capital of the company is 16 percent. The company intends to finance the project with 60 percent debt, which will bear an interest rate of 12 percent. The loan will be repaid in equal annual principal payments at the end of each of the 6 years. Flotation costs on financing amount to $1,000, and the company is in a 30 percent tax bracket.