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feasibility studies 1. ORASCOM Construction Company has a target capital structure calling 40% as debt, 10% as preferred stock and 50% as common equity and
feasibility studies
1. ORASCOM Construction Company has a target capital structure calling 40% as debt, 10% as preferred stock and 50% as common equity and it's before tax cost of debt is 10%, while the cost of preferred stock is 10.5%. The cost of retained earnings is 15.3% and the company's marginal tax rate is 30%. Calculate ORASCOM's Weighted Average Cost of Capital. 2. An item of equipment was acquired on 1st September 2023 at a cost of $100,000 has an estimated life of 10 years. Assuming that the equipment will have a salvage value of $10,000. Also the production capacity of this equipment is 500,000 unit, and the production program for the first Ithree years are 120,000;100,000 and 70,000 respectively. Determine the depreciation value for each of the first three years using: a) Sum of Digit Method b) Unit of production method Step by Step Solution
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