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What is the company’s weighted average cost of capital (WACC)?<< HIDE ANSWERSA12.00%B8.03%C9.34%D8.00%E7.68%QUESTION:3[QUESTION BANK ID:269485]TYPE:MULTIPLE CHOICECORRECTMarcos & Sons has no debt. Its current total value is $58 million. What will the company's value be if it sells $21 million in debt and has a tax rate of 34 %? Assume debt proceeds are used to repurchase equity. << HIDE ANSWERS
QUESTION:4[QUESTION BANK ID:269626]TYPE:MULTIPLE CHOICECORRECTSexton Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the higher IRR, how much value will be forgone? Note that under certain conditions choosing projects on the basis of the IRR will not cause any value to be lost because the project with the higher IRR will also have the higher NPV, so no value will be lost if the IRR method is used. WACC:10.25%Year01234CFS-$2,050$750$760$770$780CFL-$4,300$1,500$1,518$1,536$1,554<< HIDE ANSWERSQUESTION:5TYPE:MULTIPLE CHOICE
[QUESTION BANK ID:269618]CORRECTResnick Inc. is considering a project that has the following cash flow data. What is the project's payback? Year0123Cash flows-$500$150$200$300<< HIDE ANSWERS