g A company is considering a project with an initial cost of $8.5 million. The project will produce cash inflows of $1.93 million per year for 6 years. The project has the same risk as the firm. The firm has a pretax cost of debt of 5.67% and a cost of equity of 11.31%. The debt-equity ratio is 0.62 and the tax rate is 40%. What is the net present value of the project

$345,941

Explanation:

The computation of the net present value is given below:

But before that the WACC is

Weight of equity is

= 1 ÷ (1 + 0.62)

= 0.61728

And,  

Weight of debt is

= 1 - 0.6173

= 0.38275

Now  

WACC is

= 0.61728 × 0.1131 + 0.38275 × 0.0567 × ( 1 - 0.4)

= 0.069814 + 0.013021

= 0.082835 or 8.2835%

Now the net present value is

= All year cash flows × PVIFA factor at 8.2835% for 6 years - initial investment made

= $1,930,000 × 4.583389 - $8,500,000

= $345,941

-the personal ownership of property

-the influence of consumer demand

explanation:

the command economy prohibits the personal ownership of property.

basically, command economy is defined as the system where a nation’s government is the one that makes all the decisions when it comes to its economy. the government is the one who controls the production of goods and services and regulates the prices and salaries.

therefore, since that the government is the authority, then all kinds of personal ownership of property is prohibited by them.