19. apv consider a project to produce solar water heaters. it requires a $10 million investment and offers a level after-tax cash flow of $1.75 million per year for 10 years. the opportunity cost of capital is 12%, which reflects the project’s business risk. a. suppose the project is financed with $5 million of debt and $5 million of equity. the interest rate is 8% and the marginal tax rate is 35%. an equal amount of the debt will be repaid in each year of the project’s life. calculate apv.

An outside manufacturer has offered to produce 60,000 daks and ship them directly to andretti's customers. if andretti company accepts this offer, the facilities that it uses to produce daks would be idle; however, fixed manufacturing overhead costs would be reduced by 75%. because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. what is andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer?

Bdj co. wants to issue new 22-year bonds for some much-needed expansion projects. the company currently has 9.2 percent coupon bonds on the market that sell for $1,132, make semiannual payments, have a $1,000 par value, and mature in 22 years. what coupon rate should the company set on its new bonds if it wants them to sell at par?

Serious question, which is preferred in a business? pp or poopoo?