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PLEASE HELP!! I WILL LIKE ANSWER!! The financial manager has determined the following schedules for the cost of funds: Debt ratio Cost of Debt Cost
PLEASE HELP!! I WILL LIKE ANSWER!! The financial manager has determined the following schedules for the cost of funds:
The financial manager has determined the following schedules for the cost of funds: a. Determine the firm's optimal capital structure. Round your answer to two decimal places. The optimal capital structure consists of \% debt remulting in the cost of capital equal to \%. b. Construct a simple pro forma balance sheet that shows the firm's optimal combination of debt and equity for its current level of assets. Round your answers to the nearest dollar. c. An investment costs $400 and offers annual cash inflows of $133 for five yoars. Should the firm make the investment? Use Appendix D to answer the question. Round your answer to the nearest whole number. The investment be made since the internal rate of return that is % the cost of capital. d. If the firm makes this additional investment, how should its balance sheet appear? Round your answers to the nearest dollar. Interest Factors for the Present Value of an Annuitv of One Dollar Debt ratio | Cost of Debt | Cost of Equity |
0% | 5% | 10% |
5 | 5 | 10 |
10 | 5 | 10 |
15 | 5 | 10 |
20 | 5 | 12 |
25 | 6 | 14 |
30 | 9 | 16 |
a. Determine the firm's optimal capital structure. Round your answer to two decimal places.
The optimal capital structure consists of |-Select- v|% debt resulting in the cost of capital equal to
%.
b. Construct a simple pro forma balance sheet that shows the firm's optimal combination of debt and equity for its current level of assets. Round your answers to the nearest dollar.
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