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You have a project that will provide $150 yearly for 30 years. The initial discount rate for this project is 10%. The initial investment is
You have a project that will provide $150 yearly for 30 years. The initial discount rate for this project is 10%. The initial investment is $900. Compute the net present value and decide either to accept or reject the project. In order to finance this project you issue a 5-year zero coupon bond for the total amount of the initial investment. The principal is $1800. If taxes are 30%. What is the WACC for this project and given that, the new NPV?
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