Problem 1 XYZ Inc., needs $15million to finance a major product development

jagguarpaw January 6, 2017 0 Comments

Problem 1 XYZ Inc., needs $15million to finance a major product development. The project will be finances from the following sources:

Problem 1 XYZ Inc., needs $15million to finance a major product development

XYZ’s effective tax rate is 34 percent with taxes paid annually. The stock price is stable. Management determines MARR based on the weighted average cost of capital plus a constant 8percent profit. Determine the appropriate MARR for evaluating the project.