Best Answer

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

Q: What are the formulae involving the calculation of flotation cost?

Write your answer...

Submit

Still have questions?

Continue Learning about Math & Arithmetic

% 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%

recipe formulation and calculation service determintion dealing with head counts, food portioning, food cost,menu planning and cost projections there of, inventory establishment,

Related questions

This plugin in you can be using any kind of calculators like weight calculation, hotel booking quote, car renting calculation, mortgage calculator, cost calculator, finance calculator, tax calculator, and many others. You can do your form in summation, multiplication, deduction, and division as well as many other formulae.

if profit , discount % and cost price is given write the formulae to fine cost price

go up

go down

'Ganak'.

It is a calculation that determines the % of cost to sales.

the cost implication of management decision involving distribution

% loss = amount of loss / cost x 100

the flotation cost

Cost of goods sold

Production of petroleum , calculation of consumption and calculation of cost every thing was incomplete without mathematics.

Cost of goods less inventory divided by Gross Food Sales