Initial cost of the project


Target Media Inc. has a debt-equity ratio of 0.64. The firm is analyzing a new project which requires an initial cash outlay of $420,000 for equipment. The flotation cost is 9.6 percent for equity and 5.4 percent for debt. What is the initial cost of the project including the flotation costs?

A. $302,400

B. $368,924

C. $456,328

D. $456,700

E. $583,333

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Finance Basics: Initial cost of the project
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