Yesteryear Productions Is Considering a Project with an Initial Start

question 26

Multiple Choice

Yesteryear Productions is considering a project with an initial start up cost of $960,000.The firm maintains a debt-equity ratio of 0.50 and has a flotation cost of debt of 6.8 percent and a flotation cost of equity of 11.4 percent.The firm has sufficient internally generated equity to cover the equity cost of this project.What is the initial cost of the project including the flotation costs?

• A)$979,417
• B)$982,265
• C)$992,386
• D)$1,038,513
• E)$1,065,089

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Definitions:

SCID-X1

A severe immune system disorder known as X-linked severe combined immunodeficiency, primarily affecting males, where the body is unable to defend itself against bacteria, viruses, and fungi.

Leukemia

A type of cancer that affects the blood and bone marrow, characterized by the overproduction of abnormal white blood cells.

Gel Electrophoresis

A laboratory method used to separate mixtures of DNA, RNA, or proteins according to molecular size.