126.96.36.199.4. Five Rivers Casino is undergoing a major expansion. The expansion will be financed byissuing new 15-year, $1,000 par, 9% annual coupon bonds. The market price of the bonds is$1,070 each. Gamblers flotation expense on the new bonds will be $50 per bond. Gamblersmarginal tax rate is 35%. What is the pre-tax cost of debt for the newly-issued bonds? (Points :1)
8.12%7.49%10.25%5. Zellars, Inc. is considering two mutually exclusive projects, A and B. Project A costs $95,000and is expected to generate $65,000 in year one and $75,000 in year two. Project B costs$120,000 and is expected to generate $64,000 in year one, $67,000 in year two, $56,000 in year three, and $45,000 in year four. Zellars, Inc.'s required rate of return for these projects is 10%.The net present value for Project A is (Points : 1)$12,358.$16,947.$19,458.
6. Project XYZ requires an investment in equipment of $600,000 to replace existing equipment.The existing equipment will produce after-tax salvage value of $70,000. Net working capitalrequirements are increased by $50,000. What is the total cash outflow at time zero? (Points : 1)$720,000$650,000$530,000
7. Clothier, Inc. has a target capital structure of 40% debt and 60% common equity, and has a40% marginal tax rate. If Clothier's yield to maturity on bonds is 7.5% and investors require a