Question

Waterdeep Adventure Travel has an unlevered cost of equity of 18.8%, and a cost of debt of 6.1%. Their tax rate is 36%, and they maintain a capital structure of 52% debt and the rest equity. They are considering giving cave exploration tours to their menu of adventure vacations. Buying the needed equipment would cost $53,584, and would bring in $22,809 one year from today, and $88,237 two years from today. What is the NPV of this project, using the WACC method, if they invest today?

Please give your answer to the nearest dollar.

the correct answer is 1571.857

need a solution!

Answer #1

Waterdeep Adventure Travel has an unlevered cost of equity of
18.8%, and a cost of debt of 6.1%. Their tax rate is 36%, and they
maintain a capital structure of 52% debt and the rest equity. They
are considering giving cave exploration tours to their menu of
adventure vacations. Buying the needed equipment would cost
$53,584, and would bring in $22,809 one year from today, and
$88,237 two years from today. What is the NPV of this project,
using the...

Waterdeep Adventure Travel has an unlevered cost of equity of
11.2%, and a cost of debt of 7.2%. Their tax rate is 20%, and they
maintain a capital structure of 42% debt and the rest equity. They
are considering giving cave exploration tours to their menu of
adventure vacations. Buying the needed equipment would cost
$86,130, and would bring in $27,388 one year from today, and
$84,798 two years from today. What is the NPV of this project,
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