Cost of equipment = 550000, shipping and installation will be 25000, 15000 in net working capital required at set up 8 year project life. Simplified straight line depreciation. Current operating expenses are 64000 per year. New operating expenses will be 400000 per year already paid consultants 25000 for analysis. Salvage value after year 8 is 40000 annual revenues 27000 per year cost of capital = 10% marginal tax rate = 40% should we accept this project?

Miami incorporated estimates that its retained earnings break point (bpre) is $21 million, and its wacc is 13.40 percent if common equity comes from retained earnings. however, if the company issues new stock to raise new common equity, it estimates that its wacc will rise to 13.88 percent. the company is considering the following investment projects: project size irr a $4 million 14.00% b 5 million 15.10 c 4 million 16.20 d 6 million 14.20 e 1 million 13.42 f 6 million 13.75 what is the firm's optimal capital budget?