Split - Need Help Please

[Sico1134]

TGIF Sportswear is considering expanding its T-shirt line. The project would last 3 years and have an initial investment of $200,000. The after-tax cash flows are estimated at $60,000 for year one, $120,000 for year 2, and $135,000 for year 3. The firm has a target debt-to-equity ratio of 1.2. The project cost of equity is 14% and its cost of debt is 9%. The tax rate is 34%.

 

[Deleted member 4993]

TGIF Sportswear is considering expanding its T-shirt line. The project would last 3 years and have an initial investment of $200,000. The after-tax cash flows are estimated at $60,000 for year one, $120,000 for year 2, and $135,000 for year 3. The firm has a target debt-to-equity ratio of 1.2. The project cost of equity is 14% and its cost of debt is 9%. The tax rate is 34%.

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