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Alaskan Markets has a target capital structure of 45 percent debt and 55 percent equity. The pretax cost of debt is 6.5 percent, the tax
Alaskan Markets has a target capital structure of 45 percent debt and 55 percent equity. The pretax cost of debt is 6.5 percent, the tax rate is 34 percent, and the cost of equity is 13.7 percent. The firm is considering a project that is equally as risky as the overall firm. The project has an initial cash outflow of $1.8 million and annual cash inflows of $550,000 at the end of each year for four years. What is the NPV of the project?
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