Your firm has an average-risk project under consideration. You choose to fund the project in the same manner as the firm's existing capital structure. If the cost of debt is 9.00%, the cost of preferred stock is 12.00%, the cost of common stock is 16.00%, and the WACC adjusted for taxes is 14.00%, what is the NPV of the project, given the expected cash flows listed here?
A) -$74,121
B) $499,604
C) $2,175,879
D) $2,479,604

Question

Your firm has an average-risk project under consideration. You choose to fund the project in the same manner as the firm's existing capital structure. If the cost of debt is 9.00%, the cost of preferred stock is 12.00%, the cost of common stock is 16.00%, and the WACC adjusted for taxes is 14.00%, what is the NPV of the project, given the expected cash flows listed here? 
A) -$74,121 
B) $499,604 
C) $2,175,879 
D) $2,479,604

Quizplus · Accepted Answer

The Answer of Your firm has an average-risk project under consideration. You choose to fund the project in the same manner as the firm's existing capital structure. If the cost of debt is 9.00%, the cost of preferred stock is 12.00%, the cost of common stock is 16.00%, and the WACC adjusted for taxes is 14.00%, what is the NPV of the project, given the expected cash flows listed here? 
A) -$74,121 
B) $499,604 
C) $2,175,879 
D) $2,479,604

Your Firm Has an Average-Risk Project Under Consideration