Question
Your company is considering a project that will cost $1 million. The project will generate after-tax operating cash flows of $250,000 per year for 7
Your company is considering a project that will cost $1 million. The project will generate after-tax operating cash flows of $250,000 per year for 7 years. The WACC is 15%, and the firm's target D/E ratio is.6 The flotation cost for equity is 5%, and the flotation cost for debt is 3%. (step by step pls)
a )(Assume no salvage and NWC) What is the weighted average flotation cost?
b)What is the NPV for the project without considering flotation costs?
c)What is the NPV after adjusting for flotation costs?
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
15th edition
130563229X, 978-1305632301, 1305632303, 978-0357685877, 978-1305886902, 1305886909, 978-1305632295
