Calculate the firm’s WACC

• Calculate the firm’s WACC (using 2018 numbers). (You will need to collect information on the long-term debt and common stock equity from the Balance Sheet. The firm has no preferred stock).
• Use the WACC to calculate NPV and evaluate IRR for proposed capital budgeting projects. Assume the projects are mutually exclusive and the firm has the money available to fund the project.

12/31/2018

Current Assets

Cash And Cash Equivalents 8,719,000

Short Term Investments 270,000

Net Receivables 7,140,000

Inventory 3,126,000

Other Current Assets 2,042,000

Total Current Assets 21,297,000

 

Long Term Investments 2,407,000

Property Plant and Equipment 17,587,000

Goodwill 14,806,000

Intangible Assets 15,823,000

Other Assets 5,122,000

Total Assets 77,042,000

 

Current Liabilities

Accounts Payable 7,211,000

Short/Current Long Term Debt 3,951,000

Other Current Liabilities 6,601,000

Total Current Liabilities 17,763,000

 

Long Term Debt 28,293,000

Other Liabilities 12,611,000

Total Liabilities 58,667,000

 

Stockholders’ Equity

Total Stockholder Equity 18,375,000

Year 0 Year 1 Year 2 Year 3 Year 4

Project A -100,000 50,000 30,000 30,000 20,000

Project B -250,000 100,000 100,000 50,000 50,000