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Glass Blowers, Inc. has a new project in mind that will increase accounts receivable by $11,000, decrease accounts payable by $6,000, increase fixed assets by
Glass Blowers, Inc. has a new project in mind that will increase accounts receivable by $11,000, decrease accounts payable by $6,000, increase fixed assets by $6,000, decrease inventory by $18,000 and decrease long-term debt by $10,000. What is the amount the firm should use as the initial cash flow attributable to net working capital when it analyzes this project? (Numbers in parentheses are negative) O ($41,000) $1000 O ($9000) O ($17,000) ($35,000) Question 2 5 pts Our firm's capital structure based on market values is 30% debt and 70% equity. The firm's before tax cost of debt is 5%, its cost of equity is 10%, and its tax rate is 40%. Currently, the target value weight of debt is 40% and the target value weight of equity is 60%. What would be the firm's weighted average cost of capital (WACC) based on this information? 7.20% 8.75% 8.25% 7.90% 8.50%
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