What is the after tax cost of debt?

What is the WACC for Rays Racks?

What is the project NPV?

What is the project IRR?

Quiz Ray's Racks, a company that develops and manufactures bike racks and lacks, has developed a new highly simplified bike lock. It can go into production for an initial investment in million. The equipment will be depreciated straight line over 6 years to a value of zerd, but in fact it can be sold after 6 years for $671,000. The firm estimates production costs of $1.80 per lock and believes that the locks can be sold for $8 each. The firm believes that working capital (primariy for spare parts must be maintained at a level of 10% of next year's forecast sales. The project will come to an end 6 years, when the lock considered to be an average risk project for Ray's Racks. Sales forecasts (number of locks soldl are given in the following table. of $5.7 becomes technologically obsolete. The firm's tax bracket is 35%. This project s 5 5 Thereafter 3 2 1 Year 0 0 400,000 500,000 700,.000 700,000 500 000 300,000 Sales (locks) Rays Racks is a publicly traded company. The current stock price is $3.00 per share, and there are 20 million shares outstanding. The present value of the company's debt is $40000.000 The company has a bond issue outstanding with 6 years to maturity. The face value is quarterly), and the bond is currently selling for $1,020. The their beta is 1.41. The current risk free rate is 5% and the historic market retumsx s8% $1,000, the coupon company's corporate tax rate is 35% and