caps lock shift YA control S 560 Z option CON E MacBook Air Sales Variable costs (81.25% of sales) Fixed costs Depreciation (straight line) Pre-tax profit Taxes (at 40%) Profit after tax 33 Year 0 -$5,400 AO OOOOO ZA COMAB ge Chap 13 Additional practice question: A firm has 5,000,000 shares of common stock outstanding, each with a market price of $8.00 per share. The firm's equity has a beta of 1.4, and the expected market return is 15%. The tax rate is 35%. The T-Bill rate is 5.65%. 2 In addition, the firm's capital structure has 25,000 bonds outstanding, each bond has a current market value of $800 (price of the bond). The cost of debt net of tax is 7.45%. Cash Flow Forecast (000's) Years 1-12 Investment B $16,000 13,000 2,000 168 450 550 220 330 3375 Required: a) Determine if the firm should go ahead with project using NPV as the evaluation tool. b) At what opportunity cost of capital will the NPV be $0? c) If the firm considers the risk of the project to be lower than the risk of the firm, at what opportu