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This is all one question, please help solve each part! Orchard Farms has a pre-tax cost of debt of 7.68 percent and a cost of
This is all one question, please help solve each part!
Orchard Farms has a pre-tax cost of debt of 7.68 percent and a cost of equity of 15.2 percent. The firm uses the subjective approach to determine project discount rates. Currently the firm is considering a project to which it has assigned an adjustment factor of -0.5 percent. The firm's tax rate is 34 percent and its debt-equity ratio is 0.45. The project has an initial cost of $4.3 million and produces cash inflows of $1.27 million a year for 5 years. Calculate the weight of debt (rounded to the nearest tenth percent). 45.0 percent 55.0 percent 31.0 percent 69.0 percent 50.0 percent what is the weight of equity? (rounded to the nearest tenth percent). 45.0 percent 55.0 percent 31.0 percent 69.0 percent Calculate this project's WACC (rounded to the nearest tenth percent). 10.6 percent 11.1 percent 11.6 percent 12.1 percent 12.6 percent what is the net present value of the project (rounded to the nearest thousand dollars)? $514,000 $329,000 $122,000 $272,000 $561,000Step by Step Solution
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