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What is the net income of Avocado

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Reference no: EM133127911

Question - Avocado Corporation generates a $11000 in revenue this year, with the cost of goods sold of $400 and selling general and administration expense of $100. The cost of its equity' is 14%, while the risk-free rate is 5%. If the COGS only include the marginal costs of selling a computer. Avocado is considering to add $700 debt with a coupon rate of 5% and an WM of 19% to its capital structure. What is the net income of Avocado without and with the debt?

Reference no: EM133127911

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