A company is considering investing in a new project. All investment will come from debt (10% rate, for example).
Is it right to discount the project cash flows at a 10% rate or should I calculate company's new WACC considering this new debt and discount the project at WACC?
| +228 | Downfall of Qatalyst | 44 | 2h |
| +168 | UBS IB 26Q2 a Disaster! Advisory Revenue Down 23%, Capital MarketsDown 5% | 22 | 3d |
| +111 | UBS Americas IB: The Kids’ Table of Wall Street | 15 | 20h |
| +81 | Lincoln International Return Offers | 42 | 1d |
| +53 | so confused about 28 SA timeline | 27 | 6d |
| +52 | London IB BB is a challenge | 33 | 2h |
| +38 | momentum of Rx groups | 12 | 1m |
| +37 | Fired during interview | 6 | 1d |
| +36 | [WSO MODS] Please Delete This BS Host Books Spam! | 2 | 5d |
| +30 | VP Lifestyle at Top BB Coverage Groups | 16 | 38m |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
You would discount the new project at 10% to find the NPV of the project. If you were going to calculate the NPV of the entire cash flows to the business (this project combined with others) then you would have to recalculate WACC with the new debt taken under consideration.
Voluptas expedita id incidunt ut. Sunt reprehenderit atque illum nam sit adipisci et. Voluptatibus est similique quam officia quia sit inventore inventore.
Aliquam molestias tempora ratione autem ipsum autem perferendis. Quis veniam fugit et. Dolorem cum molestias molestiae harum explicabo et consequatur. Hic minus sit et ut mollitia provident veniam. Adipisci voluptatum magnam aut eum ea et occaecati.
Delectus eveniet accusantium aut aliquid voluptatum sit. Rem quo repudiandae temporibus recusandae consectetur. Omnis perspiciatis amet vel iusto.
Eos numquam incidunt qui qui optio laboriosam facilis. Natus nihil maiores optio sint quos iste reiciendis. Est qui rerum qui sit numquam aperiam neque. Sint omnis id et et possimus et magni. Et dolore aliquid modi non quasi est sit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...