Your company is considering a project that will cost $1 million.The project will generate after-tax cash flows of $250,000 per year for 7 years. The WACC is 15% and the firm's target D/E ratio is .6 The flotation cost for equity is 5% and the flotation cost for debt is 3%. What is the NPV for the project after adjusting for flotation costs?
fA = (E/V) x fE + (D/V) x fD
fA = (.375)(3%) + (.625)(5%) = 4.25%
PV of future cash flows = 1,040,105
NPV = 1,040,105 -1,000,000/(1-.0425) = -4,281
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% loss = amount of loss / cost x 100
Cost of goods less inventory divided by Gross Food Sales
cost * (1 - discount % as a decimal)
Cost Of Food __________ Food Sales Cost of Food Divided by Food sales will give you a decimal amount which you can then convert to a percentage. example: $25,780 Cost of Food Divided by $64,575 Food Sales= .399225 or 39.9% then rounded to 40%
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