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Your corporation is considering investing in a new product line. The annual revenues (sales) for...

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Finance

Your corporation is considering investing in a new product line. The annual revenues (sales) for the new product line are expected to be $356,811.00 with variable costs equal to 50% of these sales. In addition annual fixed costs associated with this new product line are expected to be $59,415.00 . The old equipment currently has no market value. The new equipment cost $74,013.00 . The new equipment will be depreciated to zero using straight-line depreciation for the three-year life of the project. At the end of the project the equipment is expected to have a salvage value of $20,582.00 . An increase in net working capital of $68,592.00 is also required for the life of the project. The corporation has a beta of 1.439 , a tax rate of 26.31% , and a target capital structure consisting of 41.01% equity and 58.99% debt. Treasury securities have a yield of 3.58% and the expected return on the market is 12.10% . In addition, the company currently has outstanding bonds that have a yield to maturity of 4.69%.

What is the corporations cost of equity?

What is the WACC?

What is the NPV for this project?

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