Use the Information for the Question(s)below

question 8

Multiple Choice

Use the information for the question(s) below.
Iota Industries Market Value Balance Sheet ($ Millions) and Cost of Capital Iota Industries New Project Free Cash Flows (Millions) Assume that this new project is of average risk for Iota and that the firm wants to hold constant its debt to equity ratio.
-The Debt Capacity for Iota's new project in year 0 is closest to:

• A)$263.25 million.
• B)$87.20 million.
• C)$50.25 million.
• D)$118.00 million.

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Definitions:

Working Memory

A set of temporary memory stores that actively manipulate and rehearse information.

Retrieval Skills

The ability to access and bring into the conscious mind stored information from memory.

Long-term Memory

The memory component in which information is stored on a relatively permanent basis.

Memory Loss

The partial or total inability to recall past experiences, often due to brain injury, disease, or psychological trauma.