Bertelli's is analyzing a project with an initial cost of $55,000 and cash inﬂows of $33,000 a year for two years. This project is an extension of the ﬁrm's current operations and thus is equally as risky as
The current ﬁrm. The ﬁrm uses only debt and common stock to ﬁnance their operations and
Maintains a debt-equity ratio of .35. The after-tax cost of debt is 6 percent and the cost of equity is
11 percent. The tax rate is 34 percent. What is the projected net present value of this project?

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The Answer of Bertelli's is analyzing a project with an initial cost of $55,000 and cash inﬂows of $33,000 a year for two years. This project is an extension of the ﬁrm's current operations and thus is equally as risky as
The current ﬁrm. The ﬁrm uses only debt and common stock to ﬁnance their operations and
Maintains a debt-equity ratio of .35. The after-tax cost of debt is 6 percent and the cost of equity is
11 percent. The tax rate is 34 percent. What is the projected net present value of this project?

Bertelli's Is Analyzing a Project with an Initial Cost of $55,000