1. Your company takes out a $ 1 8,000 interest only loan over 4 years. The current prime rate is 6% APR compounded monthly. The total interest paid is closest to:
a. 1,713
b. 2,291
c. 3,240
d. 3,438
e. 4,320
f. 4,725
2. XYZ Corp has a market capitalization of $130 million, and $40 million in outstanding debt. The firms equity beta is 0.92 , risk free rate is 2%, and market risk premium is 5%. The yield on firms outstanding debt is 6.5%. What is ABC Corps WACC after tax? Assume tax rate is 35% Show your work
3. You are presented a proposal for a project. The project costs $10,000,000 and will produce after-tax cash flows of $$2,000,000 at the end of year 1, $4,000,000 at the end of year 2, and $8,000,000 at the end of year 3. What is the NPV of this project if your WACC is 14.5%?