Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Daniel Kaffe, CFA of Kendrick Enterprises, is evaluating a 10-year, 8 percent loan with gross proceeds of $5,850,000. The interest payments on the loan will be made annually. Flotation costs are estimated to be 2.5 percent of gross proceeds and will be amortized using a straight-line schedule over the 10-year life of the loan. The company has a tax rate of 40 percent, and the loan will no increase the risk of financial distress for the company. a) Calculate the NPV of the loan excluding flotation costs b) Calculate the NPV of the loan including flotation costs
Triad Corporation has established a joint venture with Tobacco Road Construction, Inc., to build a toll road in North Carolina. The initial investment in paving equipment is $80 million. The equipment will be fully depreciated using the straight-line method over its economic life of 5 years. Earnings before interest, taxes and depreciation collected from the toll road are projected to be $12.1 million per year for 20 years starting from the end of the first year. The corporate tax rate is 35 percent, The required rate of return for the project under all-equity financing is 13 percent. The pretax cost of debt for the joint partnership is 8.5%. To encourage investment in the country’s infrastructure, the US government will subsidize the project with $25 million, 15-year loan at an interest rate of 5 percent per year. All principal will be repaid in one balloon payment at the end of Year 15. What is the adjusted present value of the project?
JackITs has 6.0 million shares of common stock outstanding, 2.0 million shares of preferred stock outstanding, and 30.00 thousand bonds. If the common shares are selling for $29.10 per share, the preferred shares are selling for $14.50 per share, and..
Stock Y has a beta of .9 and an expected return of 11.2 percent. Stock Z has a beta of 0.5 and an expected return of 7.2 percent. If the risk-free rate is 5.0 percent and the market risk premium is 6.0 percent, the reward-to-risk ratios for stocks Y ..
An interest rate swap has 3 years of remaining life. Payments are exchanged annually. Interest at 3% is paid and 12-month LIBOR is received. A exchange of payments has just taken place. The 1 year, 2 years and three years LIBOR/swap zero rates are 2%..
These are the forecasts of revenues over the lifetime of a project of 5 years. Assume all cash flows occur at the end of the year. What is the IRR of the project?
In 2 years from today, Dru plans to invest 6,700 dollars in an account that is expected to earn 13.81 percent per year. In 1 year(s), Dru plans to invest 7,600 dollars in the same account. In 9 years from today, how much money will Dru have in his ac..
You are the purchaser of a call option with $10 premium and $120 exercise price. You bought this option when the stock price was $130. If the stock price now is $120, what is the net cash flow to you if you exercise? -$5 $5 $10 -$10 0
Choose a firm/company that uses several different types of marketing communications to promote their products. Identify the firm and products you have selected to discuss. There are many ways a firm could promote its products. Different firms approac..
David runs a stop sign and causes a serious auto accident, badly injuring two people. The injured parties win lawsuits against him for $30,000 each.
Winter time adventures is going to pay an annual dividend of 2.86 a share on its common stock next year. This year the company paid a dividend of 2.75 a share. The company adheres to a constant rate of growth dividend policy. What will one share of t..
McKenna Sports Authority is getting ready to produce a new line of gold clubs by investing $1.85 million. The investment will result in additional cash flows of $525,000, $827,500, and $1,245,000 over the next three years. What is the payback period ..
Enigma has the following financial information: Net Income $70,000 Taxable Income (EBT) $100,000 Interest Expense $20,000 Depreciation Expense $15,000 Tax Expense $30,000 Increase in Current Assets $20,000 Increase in A/P and Accruals $10,000 Decreas..
An income statement may be represented as follows
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd