1. Suppose that Food Inc's capital sturcture features 55% equity, 45% debt, and that its before-tax cost of debt is 5%, while its cost of equity is 9%. If the appropriate weighted average tax rate is 40%, what will Food's WACC be?
a. 5.18
b. 5.70
c. 6.30
d. 7.20
2 .What is the net present value of a project that requires a net investment of $65,000 and produces net cash flows of $19,000 per year for 7 years? Assume the cost of capital is 15%
a. 20,047
b. 15,520
c. 19,000
d. 14,048