of capital The cost of debt is the return that lenders require on the firm's debt. Question 21 What is the effective annual rate of an 11% APR loan compounded semiannually? O 11.30% O 11.00% 12.16% O 11.15% O 11.84% Question 22 A proposed project lasts 3 years, has the same risk as the firm's current operations, an investment of $500,000. The project's after-tax cash flows are estimated at $120,00C $240,000 for year 2, and $240,000 for year 3. The firm has a target debt/equity ratio cost of equity is 15% and the yield to maturity on its debt is 8%. The firm's marginal ta What is the NPV of this project? $41,845