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Delta plc is considering a new project. For this project, Delta will incur the initial investment of 800,000, and will generate revenues of £300,000 and cash costs of 150,000 every year. Revenues and cash costs can be seen as perpetuity. Tax rate is 20% and the firm's all equity cost of capital is 15% per annum. The firm's cost of debt is 5% per annum. Delta uses £375,000 of debt to finance this project.
(a) Delta is also evaluating the use of a 4-year, 5% loan with proceeds of £375,000. The loan calls for equal annual principal payments. Calculate the net present value of the loan.
(b) Delta announced this morning that its profit from last quarter has dropped 20% compared to the previous quarter. The closing price of the company at the end of the day is up 10% from yesterday. Is this evidence against market efficiency?
The bond currently sells for 91 percent of its face value. The company's tax rate is 35 percent.
For each of the three scenarios (that is, retirement at age 60, 65 and 70), how much does she need to save each year assuming she puts $5,500 into the TFSA.
Suppose we have a risk-free asset, which delivers return rf = 0.05 and a risky asset with expected return E(R) = 0.1 and standard deviation s = 0.1.
Does this make your dissertation instantly recognisable to the reader, does it capture the theory and the context of your study?
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It can instead buy a truck at a cost of $93,000, with annual maintenance expenses of $23,000. The truck will be sold at the end of 4 years for $33,000. Calculate present value if the discount rate is 10%. Calulate to 4 decimals. PV of a Buy = PV o..
The past five monthly returns for PG&E are -3.55 percent, 4.83 percent, 4.15 percent, 7.04 percent, and 3.96 percent. Compute the standard deviation of PG&E's monthly returns. (Do not round intermediate calculations and round your final answer to ..
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the following data concern an investment projectinvestment in equipment10000net annual cash inflows2400working capital
1 a firm has net working capital of 2138and current assets of 6665. what is the current ratio?2. abc inc. has sales of
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