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The asset beta for food trucks is 0.9. XYZ Food Service has a debt to equity ratio of 0.8. The riskless rate is 2.9%, the
The asset beta for food trucks is 0.9. XYZ Food Service has a debt to equity ratio of 0.8. The riskless rate is 2.9%, the expected return on the S&P 500 is 15.0%, and the tax rate is 38.7%. XYZ can borrow at 6.0%. What is the NPV of XYZ purchasing a taco truck if it has an initial cost of $213,521 and produces EBIT of $58,572 per year for the next 20 years, using the WACC method? Please give your answer to the nearest dollar.
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