Question
The NPV should be $1496.56 and IRR is 16.19, can you please calculate the rest and show your calculations? For all of them: NPV Payback
The NPV should be $1496.56 and IRR is 16.19, can you please calculate the rest and show your calculations? For all of them:
NPV
Payback
Discounted Payback
IRR
PI
Firm-wide WACC
Time | 0 | 1 | 2 | 3 | 4 | 5 |
Cash Flow | -$221,500 | -$94,100 | $135,425 | $68,000 | $204,000 | $99,225 |
The required rate of return for this project is 16%
Maximum allowable payback and discount payback statistics for the firm are 3 and 4 years, respectively
The firm has a capital structure of 75% equity, 5% preferred stock, and 20% debt
The firm's before-tax cost of equity is 17.5%, its cost of preferred stock is 12%, and its cost of debt is 15%
The firm's debt interest is fully tax deductible
The firm's tax rate is the standard corporate tax rate
Based on the above information, calculate the following capital budgeting decision methods
NPV
Payback
Discounted Payback
IRR
PI
Firm-wide WACC
Evaluate this project for each capital budgeting decision method to determine if the project should be accepted or rejected (note: determine the feasibility of the project for EACH method)
Make a final project acceptance or rejection proposal using key finance concepts from the course to support your proposal*
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