The initial cost of the project including the flotation cost

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Reference no: EM132068750

If a company took 300 hours to assemble their first unit and 200 hours to assemble the second unit, we might expect it to take:

167 hours to assemble the third unit.

167 hours to assemble the fourth unit.

133 hours to assemble the third unit.

133 hours to assemble the fourth unit.

2. Yesteryear Productions is considering a project with an initial start-up cost of $960,000. The firm maintains a debt-equity ratio of 0.50 and has a flotation cost of debt of 6.8 percent and a flotation cost of equity of 11.4 percent. The firm has sufficient internally generated equity to cover the equity cost of this project. What is the initial cost of the project including the flotation costs?

a. $979,417

b. $982,265

c. $992,386

d. $1,038,513

e. $1,065,089

Please show the formula and then plug in numbers in the formula. Detailed. NO EXCEL.

Reference no: EM132068750

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