Thompson enterprises is considering a new project that allow it to begin operations in the mid-western united states. Projected cash flows and relevant information regarding cost of capital are presented below Year CF Total Equity Total Debt Cost of Equity 12% Cost of Debt 7% $ $ O 86% O 75% 1 O 50% $ What percentage of Thompson's total assets are financed with Equity? O 29% 2 3 4 (100,000) $ (60,000) $ 30,000 $ 12,000,000 2,000,000 5 160,000 $ 200,000

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Thompson enterprises is considering a new project that allow it to begin operations in the mid-western united
states. Projected cash flows and relevant information regarding cost of capital are presented below
Year
CF
Total Equity
Total Debt
Cost of Equity 12%
Cost of Debt
7%
$
12,000,000
$ 2,000,000
86%
75%
1
What percentage of Thompson's total assets are financed with Equity?
50%
$
O 29%
2
3
(100,000) $ (60,000) $ 30,000
4
$
160,000
5
$ 200,000
Transcribed Image Text:Thompson enterprises is considering a new project that allow it to begin operations in the mid-western united states. Projected cash flows and relevant information regarding cost of capital are presented below Year CF Total Equity Total Debt Cost of Equity 12% Cost of Debt 7% $ 12,000,000 $ 2,000,000 86% 75% 1 What percentage of Thompson's total assets are financed with Equity? 50% $ O 29% 2 3 (100,000) $ (60,000) $ 30,000 4 $ 160,000 5 $ 200,000
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