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A firm has projected the following financials for a possible project: YEAR 0 1 2 3...

A firm has projected the following financials for a possible project:

YEAR 0 1 2 3 4 5
Sales 136,856.00 136,856.00 136,856.00 136,856.00 136,856.00
Cost of Goods 62,752.00 62,752.00 62,752.00 62,752.00 62,752.00
S&A 30,000.00 30,000.00 30,000.00 30,000.00 30,000.00
Depreciation 20,519.20 20,519.20 20,519.20 20,519.20 20,519.20
Investment in NWC 1,171.00 542.00 542.00 542.00 542.00 542.00
Investment in Gross PPE 102,596.00


The firm has a capital structure of 33.00% debt and 67.00% equity. The cost of debt is 8.00%, while the cost of equity is estimated at 15.00%. The tax rate facing the firm is 36.00%. (Assume that you can't recover the final NWC position in year 5. i.e. only consider the change in NWC for each year)

What is the WACC for the project?

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Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))

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jeff jeffy answered 2 years ago
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