Appropriate weighted average tax rate

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Reference no: EM131312302

1. Suppose that Food Inc's capital sturcture features 55% equity, 45% debt, and that its before-tax cost of debt is 5%, while its cost of equity is 9%. If the appropriate weighted average tax rate is 40%, what will Food's WACC be?

a. 5.18

b. 5.70

c. 6.30

d. 7.20

2 .What is the net present value of a project that requires a net investment of $65,000 and produces net cash flows of $19,000 per year for 7 years? Assume the cost of capital is 15%

a. 20,047

b. 15,520

c. 19,000

d. 14,048

Reference no: EM131312302

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