Calculate boxton weighted averaged cost of capital

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Reference no: EM13910082

1. Boxton, Inc. is considering a project with an estimated return on 10%. Its capital structure consists of 60% debt and 40% equity. Its borrowing rate is 6% and cost of equity is 10%. Its tax rate is 30%.

(1) Calculate Boxton's weighted averaged cost of capital; and

(2) should Boxton undertake the project? Why or why not

2.Parvis, Inc., a U.S. Company is expecting cash flows in Australian dollars of: A$1 million, AS1.5 million, and AS .5 million in years 1, 2, and 3, respectively. The forecasted exchange rates are $1.03 year 1, $1.04 year 2, and $1.05 year 3.

(1) Calculate the US dollar value of the cash flows by year; and

(2) the total cash flow for the 3 years. Show how you derive answers.

Reference no: EM13910082

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