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!
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $21,000, whereas the gas-powered truck will cost $17,230. The cost of capital that applies to both investments is 11%. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,100 per year and those for the gas-powered truck will be $5,300 per year. Annual net cash flows include depreciation expenses.
a. Calculate the NPV for each type of truck. Round your answers to the nearest dollar.
b. Calculate the IRR for each type of truck. Round your answers to two decimal places
If the required return on the stock is 14 percent, what is the current share price?
Dividends have grown at the rate at 5.4% per year and are expected to continue to do so for the forseeable future. What is Cryton's cost of capital where the firm's tax rate is 30%?
A commercial bank will loan you $7,500 for two years to buy a car. The loan must repaid in 24 equal monthly payments. The annual interest rate on the loan is 12% of the unpaid balance. What is the amount of the monthly payments?
A stock has an expected return of 16.5, it's beta is 1.50, and the risk-free rate is 4.5 percent. What must the expected return on the market be?
Suppose the given statement by a financial manager: "Since we are financing our new manufacturing facility 100 percent with equity, we must estimate it using a higher rate of return than we would if we financed a portion of the facility with debt."
Determine the annualised cost of the loan for each of the following outcomes, assuming interest is based on 90 days and a 365 day year
How are compounding and discounting related? Explain time value of money.
The Corporation is planning two different capital structures. Plan 1 would result in 2,000 shares of stock and $40,000 in debt and plan 2 would result in 4,000 shares of stock and $20,000 in debt. The interest rate is 10%.
Calculation of net present value with given cash flow and compute the NPV and the appropriate rate of return
A financial analyst calculated that the after-tax salvage value for a machine was $10,200. The current book value of the asset is $12,000 and the firm's tax rate is 30%. How much could the machine be sold for today?
Discuss the importance of cash on hand and how it affects the strength of the business. Would you agree that the amount of cash on hand is a factor when comparing like businesses?
Critics of the field of international finance charge that the field is simply "corporate finance with an exchange rate."
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