Question
A firm has projected the following financials for a possible project: YEAR 0 1 2 3 4 5 Sales 136,856.00 136,856.00 136,856.00 136,856.00 136,856.00 Cost
A firm has projected the following financials for a possible project:
| YEAR | 0 | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|---|
| Sales | 136,856.00 | 136,856.00 | 136,856.00 | 136,856.00 | 136,856.00 | |
| Cost of Goods | 62,752.00 | 62,752.00 | 62,752.00 | 62,752.00 | 62,752.00 | |
| S&A | 30,000.00 | 30,000.00 | 30,000.00 | 30,000.00 | 30,000.00 | |
| Depreciation | 20,519.20 | 20,519.20 | 20,519.20 | 20,519.20 | 20,519.20 | |
| Investment in NWC | 1,171.00 | 542.00 | 542.00 | 542.00 | 542.00 | 542.00 |
| Investment in Gross PPE | 102,596.00 |
The firm has a capital structure of 33.00% debt and 67.00% equity. The cost of debt is 8.00%, while the cost of equity is estimated at 15.00%. The tax rate facing the firm is 36.00%. (Assume that you can't recover the final NWC position in year 5. i.e. only consider the change in NWC for each year)
What is the WACC for the project?
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Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))
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