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Your company is considering a $1,000,000 capital project that will generate an after-tax cash flow of $250,000 for each year of the project's 7-year
Your company is considering a $1,000,000 capital project that will generate an after-tax cash flow of $250,000 for each year of the project's 7-year lifespan. The weighted average cost of capital is 15%. The floatation cost for equity is 5% and for debt is 3%. The company's target D/E ratio is 0.6. Calculate the following returns: (1/100 of one percent without % sign, e.g., 12.671, if a negative percentage, -9.56). For dollar amounts, record to the nearest dollar with no dollar sign, e.g., 45986, if negative, -45986). 1. Weighted average floatation cost (%): 2. True cost of the project ($): 3. NPV ($):
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