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Decision tree analysis shows a project to have several possible outcomes the best of which has an NPV of $12M calculated over a five-year life. This best case path has an overall probability of occurring of 20%. A real option is available at an initial cost of $800,000 which will add a single $6M cash inflow to this best case path at its end. The option doesn't have a significant effect on the project's risk. What is the option's value? The company's cost of capital is 12%.
a. ($3,404)b. $2,604,000c. ($119,000)d. $274,000
Consider a capital expenditure project with an expected 10-year economic life and forecasted revenues equal to $40,000 per year; cash expenses are estimated to be $29,000 per year. The cost of the project equipment is $23,000, and the equipment's estimated salvage value at the end of the project is $9000. The equipment's $23,000 cost will be depreciated using MACRS depreciation (7-year asset). The project requires a $7,000 working capital investment in year 0 and another $5,000 in year 5. The company's marginal tax rate is 40%. Calculate the expected net cash flow in year 10 of the project.a. $32,000b. $27,000c. $24,000d. none of the above
Computaion of market to book ratio and A firm has current assets which could be sold for their book value of $10 million
Determine intrinsic value of the option and option's time premium at this price.
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Trentham product currently has $2,000,000 in account receivalbe and its days sales utstanding is thirty-three days. if accounts receivable comprises half of company's current assets and Trentham has $6,000,000 in net fixed assets
What is the difference between "simple" and "compound" interest? What are some of the uses of compound interest in business?
Use Systems Development Life Cycle to explain how would introducing a new payment technologies affect an organisations?
Scotto Manufacturing is a mature company in the equipment tool component industry. The company's most recent common stock dividend was $2.40 per share.
Find out the value of the firm's equity? What is the promised return on company's debt? Find out the value of the firm? How much would the company's debt be worth if there were no bankruptcy costs?
Canvas Reproductions has fixed operating cost of $12,500, variable operating costs of $10 per unit and it sells paintings for $25 each.
Computation of amount to be saved for tuition and so far with monthly payments from $250 to $800 in $50 increments
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