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If the Cost of Debt Increases to 12 Percent,should Needsalift

Question 1

Multiple Choice

If the cost of debt increases to 12 percent,should Needsalift proceed with the acquisition?


A) No, with the debt cost at 12 percent, the value of the acquisition falls below $10 million by $853,000.
B) No, with the debt cost at 12 percent, the value of the acquisition falls below $10 million by $680,518.
C) Yes, since the increased cost of debt does not affect the value of the acquisition to Needsalift.
D) Yes, with the debt cost at 12 percent the value of the acquisition exceeds $10 million by $335,374.

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