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how to calculate weighted average cost of capital Cost of Capital: ? U.S. Treasury 10 -year yield =4.31% S&P 500 Return =12.5% Capital Structure =
how to calculate weighted average cost of capital
Cost of Capital: ? U.S. Treasury 10 -year yield =4.31% S\&P 500 Return =12.5% Capital Structure = Liabilities (55%), Equity (45%) Firm's Cost of Debt = Prime Interest Rate plus 3\% Company's Beta =1.40 =412,500+337,545337,500 Project Investment Outlay, Year 0$750,000 Project Investment Life -5 years Project Depreciation - $150,000/ year Project Salvage Value - $25,000 Working Capital Base of Annual Sales - 10\% Project Tax Rate - 22% Inflation Rate for Selling Price/unit, Variable Cost/unit, and Fixed Costs =4.0% after Units sold per year 40,000 Selling Price per Unit, Year 1 - $40.00 Fixed operating costs per year excluding depreciation - $175,000 Manufacturing (Variable) costs per unit, Year 1$30.00 Step by Step Solution
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