Firm cost of capital, The firm's cost of capital is 12%,

Firm cost of capital

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Reference no: EM13742570

The Happy Pappy Puppy Company has compiled the following data for adding a new line of pets to their stores. The chief analyst, Bill, has chosen to use the RADR model. What NPV is calculated using this method? The initial investment in the project is $45,000. The firm's cost of capital is 12%, however projects in this risk class have a 14% required rate of return. The risk-free rate is 8%.

Year Cash Inflow

1 $23,000

2 19,000

3 15,000

4 13,000

5 $10,000

Reference no: EM13742570

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