Alaskan Markets Has a Target Capital Structure of 40 Percent

question 62

Multiple Choice

Alaskan Markets has a target capital structure of 40 percent debt and 60 percent equity.The pretax cost of debt is 6.3 percent,the tax rate is 35 percent,and the cost of equity is 14.6 percent.The firm is considering a project that is equally as risky as the overall firm.The project has an initial cash outflow of $1.92 million and annual cash inflows of $562,000 at the end of each year for 4 years.What is the NPV of the project?

• A)$153,776.15
• B)$148,914.70
• C)$174,087.95
• D)$157,001.03
• E)$161,950.98

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Definitions:

Statement of Values

A declaration made by an organization outlining its core principles and ethical standards, guiding its decisions and behaviors.

Whistle-Blowing

The process of revealing actions or data considered to be unethical, illegal, or improper within a public or private entity.

Unethical Behavior

refers to actions that violate moral principles or professional standards, often resulting in harm to individuals, organizations, or society as a whole.

Significant Damage

Major harm or destruction that adversely affects someone or something's value, function, or condition.