Accommodate the anticipated traffic growth

Assignment Help Financial Management
Reference no: EM131561496

A road wilt need to be widened in the future at a cost of $4.2 million to accommodate the anticipated traffic growth. The widening will be needed in 4 years if the city's optimistic growth estimate is used. The most likely and pessimistic estimates push the widening need to year 8 and year 15 respectively. The town uses an i=8%, the optimistic estimate has a probability of 20% and the pessimistic 40%.

a) What is the PW of each scenario?

b) What is the mean value of the PWs?

c) What is the expected number of years until the widening is needed?

Reference no: EM131561496

Questions Cloud

Which disputes the common myth of james : Which disputes the common myth of James as an American Robin Hood and discuss and focus one of these myths.
Write a research report on the given erp solutions : Oracle provides ERP solutions for mid-size business organizations. For this assignment, you are to write a research report on these ERP solutions.
What is growth rate in sales relative to most recent sales : What is the growth rate in sales relative to the most recent sales information you found available.
Discus the maslow hierarchy of needs : You have decided to attempt to apply Maslow's hierarchy of needs to determine what motivates each of these individuals. Why our department is made up of people.
Accommodate the anticipated traffic growth : A road wilt need to be widened in the future at a cost of $4.2 million to accommodate the anticipated traffic growth.
Statement of sources and uses of cash from entries : Complete the statement of sources and uses of cash from the following entries:
According to the put-call parity : According to the put-call parity, a synthetic short call position (-C) is created by _____ stock (S)
What is the dollar value of yubaba interest tax shield : What is Yubaba's after-tax interest rate? What is the dollar value of Yubaba's interest tax shield?
What was the irr of your investment : What was the IRR of your investment if you invested 5000 in 2015 and 10000 in 2016.

Reviews

Write a Review

Financial Management Questions & Answers

  Find the dollar-weighted annual rate of investment return

ason's trust fund has a value of 100,000 on January 1st, 2014. On April 1st, 2014 10,000 is withdrawn from the fund, and immediately after this withdrawal the fund has a value of 95,000. On January 1st, 2015 the fund value is 115,000. find the time-w..

  Firm need to sell to reach the cash break-even point

Air Purifier Inc. computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $2,460,000, but 20 percent of this value is represented by depreciation. Its contribution margin (price minus..

  Compute zero-volatility spread over the treasury spot rate

The market price of a 4-year 6% coupon non-Treasury issue is $102.4083. Calculate the current yield. Calculate the yield to maturity. Compute the zero-volatility spread over the Treasury spot rate.

  Determining which small projects should be funded

Leslie is charged with determining which small projects should be funded. Along with this assignment, she has been granted the use of $15,000 for a maximum of two years. She is considering three projects. Project A costs $7,500 and has cash flows of ..

  What is the probability that it is overvalued

Visit the Bloomberg Web site to assess the best performing mutual funds in recent periods. Is the ranking based on the last month somewhat consistent with the ranking of funds on the last year?

  What were flotation costs as fraction of funds raised

Moonscape has just completed an initial public offering. The firm sold 4 million shares at an offer price of $10 per share. The underwriting spread was $.60 a share. The price of the stock closed at $14 per share at the end of the first day of tradin..

  When the irr exceeds the cost of capital

"When the IRR exceeds the cost of capital, the NPV will be negative.", changing "negative" to "positive" would result in the statement being True.

  What is the firm cost of preferred stock

Rada Corporation’s preferred stock currently sells for $110.00 per share, What is the firm's cost of preferred stock?

  What was the firms debt-equity ratio after the switch

Eureka enterprises had an all equity cost of capital of 12 percent. When the firm switched to being levered its cost of equity increased to 13.4 percent and its pretax cost of debt was 7.5 percent. What was the firm's debt-equity ratio after the swit..

  Considering buying machine-What is the NAL of the lease

Super Sonics Entertainment is considering buying a machine that costs $660,000. The machine will be depreciated over four years by the straight-line method and will be worthless at that time. The company can lease the machine with year-end payments o..

  What is the average monthly return- current yield for bond

Average Return The past five monthly returns for K and Company are 5.65 percent, 5.53 percent, -.65 percent, 4.65 percent, and 8.65 percent. What is the average monthly return? The market price of a bond is $875. The bonds have a 4.25% coupon rate pa..

  Take bet on the yield spread between two bonds

Assume that you wish to take a bet on the yield spread between two bonds: a 10-year corporate bond rated BB and a 10-year Treasury bond. Assume that you believe the economy is going to get much worse in the future, and you wish to make your bet based..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd