Reference no: EM132619570

Question - The finance manager suggested that the company could raise these funds from a neighboring country offering the following costs of funds;

Required - Calculate the revised average cost of capital if Alliance would pursue the $40 million gas pipeline expansion project with the same capital structure of 50% debt and 50% equity from the neighboring country. Note that aggregate tax including all miscellaneous foreign fund transfers, local government-imposed tax and so on adds up to 40%.