Question 3

Ingram Electric Products is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Note that a project's projected MIRR can be less than the WACC (and even negative), in which case it will be rejected.

WACC:	9.50%
Year	0	1	2	3
Cash flows	-$800	$350	$350	$350

		15.03%
		13.73%
		10.88%
		12.95%
		10.62%

5 points

Question 4

Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for $1,200, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation?

		2.54%
		2.70%
		3.09%
		3.21%
		3.63%