Capital budgeting decision investment

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Reference no: EM132031955

Please show all work

This is the first part of the question to get the WACC:

1. Market Value...Debt/Equity

10,000 Bonds Outstanding Selling @ 105.5% of Par Value

43,000 Preferred Stock @ $60.00

300,000 Shares of Common Stock @ $40.00 per share

What is the WACC

2. Given the WACC Calculate the NPV for the following capital budgeting decision Investment is:

$400,000 Cash Flows

1st Year -55,000

2nd Year 65,000

3rd Year 75,000

4th Year 85,000

5th Year 150,000

NPV is Decision (Circle One) Accept Reject

Calculate Payback

Reference no: EM132031955

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