A Firm Is Considering a Project That Will Generate Perpetual

question 79

Multiple Choice

A firm is considering a project that will generate perpetual cash flows of $50,000 per year beginning next year.The project has the same risk as the firm's overall operations.If the firm's WACC is 12.0%,and its debt-to-equity ratio is 1.33,what is the most it could pay for the project and still earn its required rate of return?

• A) $313,283
• B) $375,094
• C) $416,667
• D) $554,167

---

Definitions:

Slough

A term used in medicine to describe the process of shedding dead tissue from a wound or sore.

Pressure Injury

Pressure injury, also known as a pressure ulcer, is localized damage to the skin and underlying tissue, primarily caused by prolonged pressure or friction.

Full-Thickness Wound

A wound that penetrates through the dermis, epidermis, and into the deeper layers of skin, potentially including muscle and bone.

Healing Process

Describes the complex biological sequence of events that occur in the human body to repair and regenerate tissue after injury.