The Daily Brew Has a Debt-Equity Ratio of 0

question 36

Multiple Choice

The Daily Brew 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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Definitions:

Republican Party

One of the two major political parties in the United States, typically associated with conservative economic and social policies.

Jay's Treaty

A 1794 treaty between the United States and Britain aimed at settling outstanding issues from the American Revolutionary War and avoiding further conflict.

Impressment

The act of forcibly enlisting individuals into military service, historically practiced by British Navy against American seamen in the early 19th century.

British Navy

The naval warfare force of the United Kingdom, historically one of the world's most powerful navies and a key component of British imperial dominance.