It will cost $3,000 to acquire a small ice cream cart. Cart…

It will cost $3,000 to acquire a small ice cream cart. Cart sales are expected to be $1,400 a year for three years. After the three years, the cart is expected to be worthless as that is the expected remaining life of the cooling system. What is the payback period of the ice cream cart?

A new grocery store requires $50 million in initial investme…

A new grocery store requires $50 million in initial investment. You estimate that the store will generate $5 million of after-tax cash flow each year for five years. At the end of five years, it can be sold for $60 million. What is the NPV of the project at a discount rate of 10%?  

KRAY Inc. has a capital structure that consists of 30% debt…

KRAY Inc. has a capital structure that consists of 30% debt and 70% equity. The company’s cost of debt is 7%. The company has a beta of 1.4. The risk-free rate equals 4.5% and the expected return on the market portfolio is 12%.     Assuming no taxes, what is KRAY’s WACC?