# FIN Ch 10 HW.xlsx - 1 What is the payback if an...

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1. What is the payback if an investment's cost is \$45,000 and the after-tax benefit is
s \$2,000 per year?
Interest PMT \$ 2,000.00 \$ 720.00 Percentage 36% 2. An interest payment of \$650 in a 20 percent tax bracket would result in a tax saving #2: An interest payment of \$2,000 in a 36% tax bracket would result in a tax saving
gs of _______________. gs of _______________.
3. Joe Morton buys a piece of equipment for \$200,000. He puts down \$40,000 and fi Joe's opportunity cost is 4 percent, and the lender's interest rate is 8 percent. Find the cost of capital (WACC).
4. Lisa Camry bought a \$15,000 car with a \$3,000 down payment. The balance is fi offering 0-percent annual interest. If Lisa's opportunity cost is a 5 percent, what is h #4: Lisa bought a \$35,000 car with a \$4,000 down payment. The balance is finan offering 1% annual interest. If Lisa’s opportunity cost is 3%, what is her WACC?
inanced by a manufacturer's sale her WACC? nced by a manufacturer’s sale ?