Example Cash inflows =$1 200 000 · Costs=77.5%ofsa|es Initial cost =$960 000 Tax rate 30% Opportunity cost of capital =21% Cost of debt =12% Cost of equity= 23.7% Debt-to-value ratio=0.30Example • Cash inflows = $1 200 000 • Costs = 77.5% of sales • Initial cost = $960 000 • Tax rate = 30% • Opportunity cost of capital = 21% • Cost of debt = 12% • Cost of equity = 23.7% • Debt-to-value ratio = 0.30