Depreis 000. an net ly. You expect that overthe!in year. Depreciation, the increase in ears, EBIT will grow at 15 percent per year, depreciation and c grow at 20 percent per year, and NWC will grow at 10 percen 235,000, s105,000, and $475,000, respectively. You expect th car 5 cash flow from assets is expected to grow at 3.5 percent indefinite the the company's stock? Adjusted Cash Flow from Assets [LO3] In the previous problem be 2.7. What is the share price now? S19.5 million in debt and 400,000 shares outstanding. After arTh WACC is 9.25 percent, and the tax rate is 35 percent. What is the price ce believe that sales in five years will be $21.5 million and the price factures time series photographic equipment. It is currently at its ta ity. The company raises all equity from outside financing. There 27. Photochronograph Corporation ts target debt new plant is expected to generate aftertax cash flows of $9.4 mill options: I. A new issue of common stock: The fl ratio of .60. It's considering building a new $65 million manufacturin ion There are three f otation costs of the new common stock companv new common stock wou the company's te be 8 percent of the amount raised. The required return on the equity is 14 percent. s of the new bonds would 2. A new issue of 20-year bonds: The flotation costs of the new bon 4 percent of the proceeds. If the compeny issues these new bonds at an oupon rate of 8 percent, they wili seil at par the company's ongoing daily business, it has no flotation c target ratio of accounts payable to long-term debt of .15. (Assume this financing is par osts, and the 3. Increased use of accounts payable financing: Because this financi compaty anagement hasa there is s assigns it a cost that is the same as the overall firm WACC. Managementh IS difference between the pretax and aftertax accounts payable cost.) What is the NPV of the new plant? Assume that PC has a 35 percent tax rate. Flotation Costs[LO4] Sheaves Corp. has a debt-equity ratio of .75. The compo is considering a new plant that will cost $48 million to build. When the compar issues new equity, it incurs a flotation cost of 8 percent. The flotation cost on n debt is 3.5 percent. What is the initial cost of the plant if the company raises all qui externally? What if it typically uses 60 percent retained earnings? What if all equt 29. investment is financed through retained earnings? 30. Project Evaluation [L03, 4] This is a comprehensive project evaluation protle bringing together much of what you have learned in this and previous chapters Su pose you have been hired as a financial consultant to Defense Electronics, Inc. a large, publicly traded firm that is the market share leader in radar detection systea ics, Inc.(DEl (RDSs). The company is looking at setting up a manufacturing plant ov produce a new line of RDSs. This will be a five-year project. The company bp some land three years ago for $3.9 million in anticipation of using it as ato .9 million in anticipation of using it as a toxic