Find the net present value

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Reference no: EM131579200

Next year’s numbers include these:

EBIT = 1,000

Depreciation = 250

Taxes = 100

Net increase in Working Capital = 50

Net Increase in Capital Expenditure = 250

Long-term sustainable growth = 4%

Risk free rate = 3%

Beta = 1.5%

Equity Risk Premium = 7%

D/E = 0.333

Investment = -$10,000 (occurs at time = 0)

Cost of debt (prior to tax adjustment) = 7%

Corporate tax rate = 33%

FIND: Net Present Value (NPV). Use CFFA for cash flow and WACC for the discount rate.

A. -533

B. 677

C. 11,644

D. -255

F. 1,644

G. 839

Reference no: EM131579200

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