What would be Katydid before-tax component cost of debt

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Q1. You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $16,500 to purchase and which will have OCF of -$1,700 annually throughout the vehicle's expected life of three years as a delivery vehicle; and the Toyota Prius, which will cost $24,000 to purchase and which will have OCF of -$900 annually throughout that vehicle's expected 4-year life. Both cars will be worthless at the end of their life. You intend to replace whichever type of car you choose with the same thing when its life runs out, again and again out into the foreseeable future. If the business has a cost of capital of 13 percent, calculate the EAC for Scion and Prius

Q2. Compute the IRR static for Project E. The appropriate cost of capital is 8 percent. Cash Flows Year0 -3200 Year1 950 Year2 930 Year3 820 Year4 600 Year5 400.

Q3. KatyDid Clothes has a $170 million (face value) 30-year bond issue selling for 102 percent of par that carries a coupon rate of 13 percent, paid semiannually. What would be Katydid's before-tax component cost of debt?

Reference no: EM132610360

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