What will the initial outlay for the project be

Assignment Help Financial Management

Reference no: EM131573116

The Faraway Moving Company is involved in a major plant expansion that involves the expenditure of $199 million in the coming year. The firm plans on financing the expansion through the retention of $127 million in firm earnings and by borrowing the remaining $72 million. In return for helping sell the $72 million in new debt, the firm's investment banker charges a fee of 150 basis points (where one basis point is 0.01 percent). If Faraway decides to adjust for these flotation costs by adding them to the initial outlay, what will the initial outlay for the project be?

The flotation cost adjusted initial outlay is $______ (Round to nearest dollar)

Reference no: EM131573116

Questions Cloud

Describe the strengths of the uks health system : Write a 2-3 page paper describing the strengths and weakness of the U.K.'s Health System.

What is your estimate of its WACC : You would like to estimate the weighted average cost of capital for a new airline business. what is your estimate of its WACC?

Imagine you jump off a ladder onto the ground : Imagine you jump off a ladder onto the ground. What happens to your momentum when you land? Is momentum conserved in this situation?

Recurrence relation for number of rounds in tournament : Suppose that there are n = 2k teams in an elimination tournament, where there are n/2 games in the first round, with the n/2 = 2k-1.

What will the initial outlay for the project be : If Faraway decides to adjust for these flotation costs by adding them to the initial outlay, what will the initial outlay for the project be?

What is the company inventory turnover ratio : JP Vineyards has sales of $844,000, a gross profit margin of 0.397, and inventory of $176,000. What is the company's inventory turnover ratio

What is present value of this liability : If the relevant annual rate of return is 8.5 percent, what is the present value of this liability?

The difference between licensure and certification : What are some actions that can cause a healthcare professional to lose a license? What happens to healthcare workers if a physician's license has been lost?

Jump off a ladder onto the ground : What happens to your momentum when you land? Is momentum conserved in this situation? Explain your answers.

User Account

All Pages