1 pts Question 17 You are considering investing in a project that increases annual costs by $25,000 per year over the project's 5 year life. The project has an initial cost of $500,000 and will be depreciated straight-line over 5 years. Assume a 32% tax bracket and a discount rate of 11%. Suppose the equipment is sold at the end of year 5 for $300,000, pretax. What is the after tax salvage value? $204,000 $198.000 $188,000 $202.000 $300,000 1 pts Question 21 Jake the Dog Inc. is investing in a new portable iguana killing machine that will cost $210,000. The machine has a useful life of 6 years and falls into the 5-year property class for the depreciation purposes. The IRS MACRS schedule for the six years is: (1) 20%, (2) 32%, (3) 19.2%, (4) 11.52%, (5) 11.52%, (6) 5.76%. It will generate $50,000 per year of savings for Jake and can be sold for $50,000 at the end of the 6-year period. Jake's corporate tax rate is 32%. In addition, Jake has 2000 outstanding 9% annual coupon bonds with a $1000 par value, 20 years to maturity and a price of $1085. Jake also has 80,000 shares of common stock outstanding that is selling for $45 per share. This stock has a beta of 2.25 (its Jake! he is a risky dog-dude!!), the expected market return is 12% and the risk-free rate is 5%. Finally, Jake has 36,000 shares preferred stock outstanding that pays a 3.5% dividend and sells for $40 per share. What is the after-tax cost of debt for Jake? 6.36% O 7.65% O 5.36% 5.86% 5.53% Next