Reference no: EM131018952
7. You have estimated the beta of Ajax Ltd against the ASX200 as being 1.2. The average risk premium for the Australian market you estimate to be 6% and the risk free rate as represented by the current yield to maturity of an Australian government 10-year bond is 3.9%.
Estimate the cost of equity for Ajax Ltd, using CAPM.
(Show your answer as a percentage to one decimal place, eg 99.9%)
Answer:
Number
Unit
8. A company is considering investing in some new equipment. The new equipment will deliver cost savings of $100,000 in the first year and $130,000 in the second year, before being sold for $56,000 at the end of the second year. It will cost $230,000 to buy and install the new equipment, which will be paid on purchase.
Assuming a cost of capital equal to 11.4%, estimate the NPV of the investment in new equipment.
(Show your answer with no decimal places.)
Answer:
Unit
Number
9. You have estimated the NPV of a project and wish to evaluate the sensitivity of the NPV you have estimated to a change in the cash flows estimated for the project. All else being held equal, if you were to estimate higher future cash flows for the project, would you expect the NPV to:Choose one answer.
A. Show no change
B. Fall
C. Rise
D. Either rise or fall
10. You have estimated the NPV of a project and wish to evaluate the sensitivity of the NPV you have estimated to a change in the estimation of the risk inherent in the project. If you were to increase your estimate of the risk associated with the project, resulting in an increased discount rate, would you expect the NPV to:Choose one answer.
A. Rise
B. Fall
C. Either rise or fall
D. Show no change
|
The purpose of this assignment is to connect theory
: The purpose of this Assignment is to connect theory to practice. You will connect what you did this past week with the course outcomes and professional competencies listed in the Unit 1 Assignment Rubric.
|
|
Which if any of the obstacles to moral behavior
: Read again the account of BF Goodrich, Lawson and Vandivier. Which if any of the obstacles to moral behavior do you see operating in the BF Goodrich situation?
|
|
How should the business financing be recorded on the books
: How should the business financing be recorded on the books of the company? What critical errors do you see in the initial planning phase of our company?
|
|
What would be the total amount of assets
: What would be the total amount of assets (related to the note receivable) reported on Miles balance sheet dated December 31, 2014? (Points : 2) $4,000 $4,133 $4,320 $4,187
|
|
A company is considering investing in some new equipment
: A company is considering investing in some new equipment. The new equipment will deliver cost savings of $100,000 in the first year and $130,000 in the second year, before being sold for $56,000 at the end of the second year.
|
|
Jupiter ltd is considering an investment in a licence
: The most accurate measure of the cost of a company's debt is:Choose one answer.A.The yield to maturity of the company's market traded debt.B.The company's interest expense.C.The coupon rate of the company's market traded debt.D.The yield of an Austra..
|
|
Draw the production possibilities frontiers
: Draw the production possibilities frontiers (PPFs) for Australia and Belgium with cars on the horizontal axis and sweaters on the vertical axis.
|
|
What is the average total cost for the representative firm
: What is the average total cost for the representative firm? In the long run, how many units will this firm produce and what price will it sell each unit for in this market
|
|
What is its thermal resistance
: A particular transistor has a power rating at 25°C of 10 W, and a maximum junction temperature of 150°C. What is its thermal resistance? What is its power rating when operated at an ambient temperature of 50°C? What is its junction temperature whe..
|