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A project has an initial cost of $45,000. The incremental inflows associated with the project are $20,000 in year 1, $15,000 in year 2, $10,000
A project has an initial cost of $45,000. The incremental inflows associated with the project are $20,000 in year 1, $15,000 in year 2, $10,000 in year 3 and $8,000 in year 4. All cash inflows are at the end of the year. The appropriate discount rate for this project is 8.0%. The component costs of capital and their weights are given below: 7. What is the projects weighted-average cost of capital? kd = 10% wd = 45% kp = 5% wp = 10% ke = 8% we = 45% T = 40% a. 6.8% b. 2.4% c. 4.3% d. 8.5%.
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