Your company is considering a project that will cost $5 million. The project will generate after-tax cash flows of $1,050,000 per year for 8 years. The firms WACC is 18% and the firms target D/E ratio is 1.10. The flotation cost for equity is 5% and the flotation cost for debt is 3%. What is the NPV for the project after adjusting for flotation costs? What is the proportion of debt in the firms capital structure?

What is the percentage weighted average flotation cost?

What is the dollar value of the flotation costs?

What is the projects NPV, ignoring flotation costs?

What is the projects NPV, after incorporating flotation costs?