Suppose Your Company Needs $14 Million to Build a New

question 33

Multiple Choice

Suppose your company needs $14 million to build a new assembly line.Your target debt-equity ratio is 0.84.The flotation cost for new equity is 9.5 percent,but the floatation cost for debt is only 2.5 percent.What is the true cost of building the new assembly line after taking flotation costs into account?

• A)14.82 million
• B)14.94 million
• C)15.07 million
• D)15.12 million
• E)15.23 million

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Definitions:

PERT Chart

Stands for Program Evaluation Review Technique chart, a tool used in project management to map out and analyze the tasks involved in completing a project.

Critical Events

Significant occurrences that have a profound impact on processes or outcomes, often necessitating immediate attention or action.

Network

A group or system of interconnected people or things, often used to refer to digital communication systems or social structures.

Managing Projects

The process of planning, organizing, motivating, and controlling resources to achieve specific goals.