Question
Alaskan Markets has a target capital structure of 40 percent debt and 60 percent equity. The pretax cost of debt is 6.3 percent, the tax
Alaskan Markets has a target capital structure of 40 percent debt and 60 percent equity. The pretax cost of debt is 6.3 percent, the tax rate is 35 percent, and the cost of equity is 14.6 percent. The firm is considering a project that is equally as risky as the overall firm. The project has an initial cash outflow of $1.92 million and annual cash inflows of $562,000 at the end of each year for 4 years. What is the NPV of the project?
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
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