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 11.00%, the cost of preferred stock is 12.00%, the cost of common stock is 17.00%, and the WACC adjusted for taxes is 15.00%, what is the NPV of the project, given the expected cash flows listed here?
A) -$917,930
B) -$293,289
C) $0
D) $126,471

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 11.00%, the cost of preferred stock is 12.00%, the cost of common stock is 17.00%, and the WACC adjusted for taxes is 15.00%, what is the NPV of the project, given the expected cash flows listed here? 
A) -$917,930 
B) -$293,289 
C) $0 
D) $126,471

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 11.00%, the cost of preferred stock is 12.00%, the cost of common stock is 17.00%, and the WACC adjusted for taxes is 15.00%, what is the NPV of the project, given the expected cash flows listed here? 
A) -$917,930 
B) -$293,289 
C) $0 
D) $126,471

Your Firm Has an Average-Risk Project Under Consideration