A firm with 50% debt to equity ratio has a cost of equity capital of 15%, a cost of debt of 9% and a tax rate of 33%. The firm is considering a project costing 5,000 that will generate an annual cash flow of 1,000 for the next 8 years. What is the projects NPV?

Question

A firm with 50% debt to equity ratio has a cost of equity capital of 15%, a cost of debt of 9% and a tax rate of 33%.  The firm is considering a project costing 5,000 that will generate an annual cash flow of 1,000 for the next 8 years.  What is the projects NPV?