Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

how do I calculate the PV 6) TYP has a target D/E ratio of 25%. The flotation costs for equity is 6% and the flotation

how do I calculate the PV
image text in transcribed
6) TYP has a target D/E ratio of 25%. The flotation costs for equity is 6% and the flotation cost for debt is 4%. TYP is considering a project that will cost $2.8 million. The project will generate after-tax cash flows of $750,000 per year for 6 years. The WACC is 15%. a) What is the NPV of the project without adjusting for flotation costs? (3 marks) N=6,I=15%,PMT=750000,FV=0,PV=$2,838,362.02 NPV of the project =$2,838,362.02$2,800,000=$38,362.02

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance For IT Decision Makers

Authors: Michael Blackstaff

3rd Edition

1780171226, 978-1780171227

More Books

Students also viewed these Finance questions

Question

Explain the importance of nonverbal messages.

Answered: 1 week ago

Question

Describe the advantages of effective listening.

Answered: 1 week ago

Question

Prepare an employment application.

Answered: 1 week ago