Yоur cоrpоrаtion is considering investing in а new product line. The аnnual revenues (sales) for the new product line are expected to be $164,226.00 with variable costs equal to 50% of these sales. In addition annual fixed costs associated with this new product line are expected to be $57,491.00 . The old equipment currently has no market value. The new equipment cost $82,123.00 . The new equipment will be depreciated to zero using straight-line depreciation for the three-year life of the project. At the end of the project the equipment is expected to have a salvage value of $14,924.00 . An increase in net working capital of $57,466.00 is also required for the life of the project. The corporation has a beta of 1.662 , a tax rate of 34.89% , and a target capital structure consisting of 51.13% equity and 48.87% debt. Treasury securities have a yield of 1.55% and the expected return on the market is 7.00% . In addition, the company currently has outstanding bonds that have a yield to maturity of 8.34%. For answers that are dollar amounts, please round to the nearest two decimal places. For answers that are a percentage, please be sure to enter your answer as a percentage (for example, .1234 becomes 12.34%). What is the total initial cash outflow? (show as negative number): $[1] What are the estimated annual operating cash flows? $[2] What is the terminal cash flow? $[3] What is the corporations cost of equity? $[4] What is the WACC? [5]% What is the NPV for this project? $[6]
Pаper: kettell.pdf | Yоu dоwnlоаd аnd/or print this for reference as you complete part 2 of the exam. PSU Library Access: Click on the Library Resources link in the left-hand navigation bar to access the PSU libraries and assist in completing this exam. You may download PDFs from the library and access/reference them throughout this exam. In addition, here is a quick to Penn State University Libraries search.