Time 0 1 2 3 4 5

Cash Flow -$175,000 -$65,800 $94,000 $41,000 $122,000 $81,200

The required rate of return for this project is 11% Maximum allowable payback and discount payback statistics for the firm are 3 and 3.5 years, respectively The firm has a capital structure of 73% equity, 5% preferred stock, and 22% debt The firms before-tax cost of debt is 12%, its cost of equity is 15%, and its cost of preferred stock is 10% The firms debt interest is fully tax deductible The firms tax rate is the standard corporate tax rate

• calculate the following capital budgeting decision methods: Firm-wide WACC ?