The NuPress Valet Co

question 46

Multiple Choice

The NuPress Valet Co.has an improved version of its hotel stand.The investment cost is expected to be $72 million and will return $13.5 million for 5 years in net cash flows.The ratio of debt to equity is 1 to 1.The cost of equity is 13%, the cost of debt is 9%, and the tax rate is 34%.The appropriate discount rate, assuming average risk, is:

• A)8.65%
• B)9%
• C)9.47%
• D)10.5%
• E)13%

---

Definitions:

Alcohol

A psychoactive substance found in drinks such as beer, wine, and spirits that can affect the mind and body.

Amphetamines

Stimulant drugs that speed up the nervous system, often used to treat conditions like ADHD.

Tolerance

The capacity to endure continued subjection to something, such as a drug or environmental conditions, without adverse reaction.

Drug

A substance which has a physiological effect when ingested or otherwise introduced into the body, often used for medicinal, recreational, or performance-enhancing purposes.