A manufacturer of air filter systems for industrial facilities,
is considering the addition of a new system to its current product
line. The following data has been forecasted:
Years
2012
2013
2014
2015
Depreciation
30,000
35000
40000
45000
EBIT
100,000
125,000
150,000
175,000
Investment in Operating Assets
30,000
40,000
50,000
60,000
The market value of the firm's debt is $500,000 and it has
$150,000 in marketable securities. The company also has 10,000 of
preferred stocks that just paid an annual...