THe company prasented with two project Project A and Project B Table below show cash flow of two project

692 views
0
Find the synopsys company ‘s weighted average coct of the capital (wacc)
0

Here we do not have provided with the tax struture of the company so for finding out the WACC we will find out the IRR of the both the project as follow

Project A

IRR

0 = -100 + 70(1+r)1 +50(1+r)2 +20(1+r)3

Solving this equation by trial and error method we will get

WACC of the project A =23.5641

=23.56%

 

Project B

IRR

0 = -100 + 10(1+r)1 +60(1+r)2 +80(1+r)3

Solving this equation by trial and error method we will get

WACC of the project B =18.1258%

=18.13%

Contact us today

Ask for our academic services

Copyright SmartStudyHelp 2016. All Rights Reserved