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What is initial cost of the project including the flotation

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Reference no: EM132762506

Problem 1: Yesteryear Productions is considering a project with an initial costs of $318,000. The firm maintains a debt-equity ratio of .60 and has a flotation cost of debt of 5.2 percent and a flotation cost of equity of 11.1 percent. The firm has sufficient internally generated equity to cover the equity cost of this project. What is the initial cost of the project including the flotation costs?

Group of answer choices

Option 1: $324,324

Option 2: None of the answers provided is correct.

Option 3: $318,513

Option 4: $324,706

Option 5: $349,029

Reference no: EM132762506

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