问题
单项选择题
A company is considering a $10000 project that will last 5 years. Annual after tax cash flows are expected to be $3000 Target debt/equity ratio is 0.4 Cost of equity is 12% Cost of debt is 6% Tax rate 34% What is the project’s net present value (NPV)（）
A. + $1460.
B. + $1245
C.$0.
答案
参考答案：A
解析：
First, calculate the weights for debt and equity
wd+we=1
we=1-wd
wd/we=0.40
wd=0.40×(1-wd)
wd=0.40-0.40wd
1.40wd=0.40
wd=0.286, we=0.714
Second, calculate WACC
WACC=(we×kd)×(1-t)+(we×ke)=(0.286×0.06×0.66)+(0.714×0.12)= 0.0113+0.0857=0.0970
Third, calculate the PV of the project cash flows
N=5, PMT=-3000, FV=0, I/Y=9.7, CPT PV=11460
And finally, calculate the project NPV by subtracting out the initial cash flow NPV=11460-$10000= $1460