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The Extreme project has an initial investment cost of $ 1,000 and expected positive net...

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Accounting

The Extreme project has an initial investment cost of $ 1,000 and expected positive net cash flows of $ 220 per year from year 1 to year 10 (useful life), the tax rate is 30%. Consider the entire analysis in current pesos. Some additional information: In the market there is a 30-year CETES risk-free interest rate: 6% The cost of Extreme debt is 9% before taxes. The average market return measured through the long-term CPI is 14%. The capital structure for the financing of Extremo is 60% debt, 40% capital the beta of the company is 1.2 What is the Weighted Average Cost of Capital (WACC) of the company? (in percentage)

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