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Business, 31.03.2020 23:28 nireegnu

You want to invest in a project in Canada that has an initial cost of C$812,000 and is expected to produce cash inflows of C$340,000 a year for three years. The project will be worthless after three years. The risk-free rate in Canada is 4 percent while it is only 3 percent in the U. S. The applicable interest rate for the project in Canada is 12 percent. Assume the current spot rate is C$1. What is the WACC you should use if you want to evaluate the project using US cash flows? Please show your work.
a. 10.92%
b. 12%
c. 13.09%
d. 15%
e. 16%

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