question 8

Question 8 3 points Save Answer Joe Vandelay buys a piece of equipment for $200,000. He puts down $40,000 and finances $160,000 from a local bank. Joe s opportunity cost is 5% and the bank charges 10% on the loan. The after-tax cash flows generated from the equipment are $54,000 per year for the next 5 years What is Joe's weighted average cost of capital? a. 10% O b.7% O c. 8% O d.9%