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Hey can anyone help me answer these two finance questions? I'd really appreciate it! Question 2 10 Points Save Answer Your edgling company cl.1rren113.r mamlfactures

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Hey can anyone help me answer these two finance questions? I'd really appreciate it!

image text in transcribedimage text in transcribed
Question 2 10 Points Save Answer Your edgling company cl.1rren113.r mamlfactures cheap t-shirls that are sold to often ioebriated students on Spring Break. Many oftnem seem to get sunmn'neo sloee they don't have the senseto put on sunscreen. Thus, as a public service, you have decided tel-expand your product line and offer equally cheap hats. To do so will require purchasing new equipment You have the following information on this investment project, what are the aerhtax cash ows that it is expected to generate? (my answers are in thousands) 0 Cost ofhat making machinery: 590,000 0 Expected life ofmachinery: 5 years 0 Expected Salvage Value ofhatmaking machinery after 5 years: $20,000 0 Depreciation method: straight line 0 Expected sales ofhats: $130,000 per year Cost of raw material: $70,000 per year Cost of additional labor: $30,000 per year Additional Net Working Capital required at the start ofthe project: 820,004] Tax rate: 3 5%. 0000 Oa. -11[} f 25.8 f25.8 f 25.8 f25.8 .I' 58.8 O b- -11[} I 25.8 1'218 I 25.8 f25.8 i 65.8 O C- -90 f 25.8 {25.8 f25.8 .I' 25.8 1' 38.8 Od--9-Df25.1f25.1f25.1f25.1f58.1 OE~-11@/ 31.6 f 31.6 / 31.6 I 31.6 I 64.6 . m i ts ' Question 3 P0 n Save Answer Your firm's capital structure is as Follows: I Debi: Book value = $200111 Market value = $225M Coupon me = 8% Yield to Maturity = 6% 0000 I Preferred Stuck 0 Book value = $T5n1 0 Market value = $7511: 0 Required Rate ufReturn = 9% I Common Stock 0 Book value = $150m 0 Market value = $300M 0 Required Rate ofRetum =12% Assume that the unpomte tax rate is 35%. What is your Erin's WACC'? 03. 3.5995 0 b. 9.6696 O c. 9.039; Q d. 3.2995 0 e. 9.3896

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