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 9.50%, the cost of preferred stock is 10.00%, the cost of common stock is 12.00%, and the WACC adjusted for taxes is 11.50%, what is the NPV of the project, given the expected cash flows listed here?
A) $1,150,904
B) $898,415
C) $300,904
D) $48,415

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 9.50%, the cost of preferred stock is 10.00%, the cost of common stock is 12.00%, and the WACC adjusted for taxes is 11.50%, what is the NPV of the project, given the expected cash flows listed here? 
A) $1,150,904 
B) $898,415 
C) $300,904 
D) $48,415

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 9.50%, the cost of preferred stock is 10.00%, the cost of common stock is 12.00%, and the WACC adjusted for taxes is 11.50%, what is the NPV of the project, given the expected cash flows listed here? 
A) $1,150,904 
B) $898,415 
C) $300,904 
D) $48,415

Your Firm Has an Average-Risk Project Under Consideration