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Glitter Inc. uses one - quarter common stock and three - quarters debt to finance their...

Glitter Inc. uses one - quarter common stock and three - quarters debt to finance their operations . The after - tax cost of debt is 5 percent and the cost of equity is 13 percent . The management of Glitter Inc. is considering an expansion project that costs $ 1.2 million . The project will produce a cash inflow of $ 50,000 in the first year and 150,000 in each of the following 10 years ( i.e. , $ 150,000 in years 2 through 11 ) What is the WACC and should Glitter Inc. invest in this project ?

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jeff jeffy answered 2 years ago
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