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XF Express has a debt-equity ratio of 0.7. The pre-tax cost of debt is 8.5 percent while the unlevered cost of capital is 15 percent.
XF Express has a debt-equity ratio of 0.7. The pre-tax cost of debt is 8.5 percent while the unlevered cost of capital is 15 percent. What is the cost of equity if the tax rate is 35 percent? a. 13.79 percent b. 14.28 percent c. 17.96 percent Anxin Fashion is considering two mutually exclusive projects. The required rate of return is 13.9 percent for Project A and 12.5 percent for Project B. Project A has an initial cost of $54,500 and should produce cash inflows of $16,400, $28,900, and $31,700 for Years 1 to 3, respectively. Project B has an initial cost of $69,400 and should produce cash inflows of $0, $48,300, and $42,100, for Years 1 to 3, respectively. Which project should be accepted based on the NPV rule? a. neither project A nor project B b. project B c. project A
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