QUESTIONS Discuss how taxes and cost of financial distress can influence the value of a of a firm if a company is financed by both equity and debt. For the toolbar.press ALT+F10 PO O ALTFN F10 M) B 1 s Paragraph Arial 14px A 1 XGQ v 5 QUESTION 10 What is the meaning of the cost of debt and discuss any one method to determine its value. For the toolbar Orec ALTFINIR ALTEEN510/Mac Click Save and Submit to save and submit Click Save All Answers to sove all answers. ASUS VivoBook 14 WACC 11.50% Year Cash flow Discounted cash flow 0 -55000 -55000/(1+0.115)^(0) = -55000 1 18775 18775/(1+0.115)^(1)=16838.565 2. 27000 27000/(1+0.115)^(2)=21717.71 3 12000 12000/(1+0.115)^(3)= 8656.78525 4 23400 23400/(1+0.115)^(4)= 15139.6693 NPV 7352.72952 As NPV of the project is positive, the decision rule says that NPV>0, project should be taken hence company should take this project. QUESTIONS Discuss how taxes and cost of financial distress can influence the value of a of a firm if a company is financed by both equity and debt. For the toolbar.press ALT+F10 PO O ALTFN F10 M) B 1 s Paragraph Arial 14px A 1 XGQ v 5 QUESTION 10 What is the meaning of the cost of debt and discuss any one method to determine its value. For the toolbar Orec ALTFINIR ALTEEN510/Mac Click Save and Submit to save and submit Click Save All Answers to sove all answers. ASUS VivoBook 14 WACC 11.50% Year Cash flow Discounted cash flow 0 -55000 -55000/(1+0.115)^(0) = -55000 1 18775 18775/(1+0.115)^(1)=16838.565 2. 27000 27000/(1+0.115)^(2)=21717.71 3 12000 12000/(1+0.115)^(3)= 8656.78525 4 23400 23400/(1+0.115)^(4)= 15139.6693 NPV 7352.72952 As NPV of the project is positive, the decision rule says that NPV>0, project should be taken hence company should take this project