A project requires a cost of $ 500,000 and generates cash flow of $ 42,500 per year in…

A project requires a cost of $ 500,000 and generates cash flow of $ 42,500 per year in perpetuity. The cost of capital in the case of total equity financing is 10%, and the project allows the company to borrow constantly and in perpetuity an amount of $ 300,000 at the rate of 5%. The corporate tax rate is 35%. Calculate the VANA of this project.

Options for question 28:

$ 30,000

$ 28,000

$ 65,000

$ 85,000

$ 42,500

Question 29 (1 point)

RRC currently owns 350,000 shares priced at $ 90 per share. If there is neither market imperfection, nor tax. What will the share price be after a two-for-five reverse stock split?

Options for question 29:

$ 108.00

$ 105.00

$ 36.00

$ 90.00

$ 225.00