Calculate the npv of the loan financing

Assignment Help Finance Basics
Reference no: EM133072441

ABC borrows $11,632 at a subsidized rate of 2.7% to invest in a project. The project lasts for 11 years and ABC repays the loan at the end of the project. If ABC's cost of debt is 7.7% and the tax rate is 32%, calculate the NPV of the this loan financing.

Reference no: EM133072441

Questions Cloud

How many workers should Ms Smith hire : She estimates that additional workers would generate the following total output where each unit of output is $10, How many workers should Ms Smith hire
Expected long-run dividend payout ratio : Banyan Co.'s common stock currently sells for $34.75 per share. The growth rate is a constant 6%, and the company has an expected dividend yield of 3%.
Calculate the past growth rate in earnings : The Bouchard Company's EPS was $6.10 in 2021, up from $3.95 in 2016. The company pays out 60% of its earnings as dividends, and its common stock sells for $39.0
Partial melting-geological processes that lead to melting : Explain partial melting and the geological processes that lead to melting. Describe, in general terms, the range of chemical compositions of magmas.
Calculate the npv of the loan financing : ABC borrows $11,632 at a subsidized rate of 2.7% to invest in a project. The project lasts for 11 years and ABC repays the loan at the end of the project.
Calculate the total annual inventory cost : In addition, the relevant carrying cost is $2.50 a copy per year. Calculate the total annual inventory cost
Classic definition of roic treats non-current liabilities : When company has significant interest-bearing noncurrent liabilities, these are viewed as a source of invested capital.
What is the position that your firm takes : -Your firm anticipates receiving a $10 million payment in 3 months, and wants to invest that money for 3 months at ICELIBOR rates for 3 months (or 91 days) once
Journalize the entries in the partnership accounts : The partners agree that the equipment is to be valued at $67,900, Journalize the entries in the partnership accounts for Jesse's investment and Tim's investment

Reviews

Write a Review

Finance Basics Questions & Answers

  Optimise the investment decision

You work for the world-renowned WIM Consultancy, an affiliate of the recently merged Deloitte McKinsey Investment Bank. Your company has been retained by a very

  What is the yield to maturity for bonds

Blue Crab, Inc. plans to issue new bonds, but is uncertain how the market would set the yield to maturity.

  Purpose of the working group for financial markets

But the price discovery mechanism requires a freely traded market which is not manipulated by governments.

  How much will the dividend be at the end of the fifth year

How much will the dividend be at the end of the fifth year? Answer to the nearest cent, e.g $5.678 should be entered as 5.68. Do not enter the $ sign.

  Assume the debt in the previous question is trading at

assume the debt in the previous question is trading at 1035. how can you earn a riskless profit from this situation

  Explain why management may tend to pursue goals other than

explain why management may tend to pursue goals other than shareholder wealth

  Housing market crisis and subsequently to the financial

Under what conditions can such capital inflow be redirected to other countries? What are potential consequences of that to the U.S economy? Why is it unlikely that "global imbalances" contribute to the housing market crisis and subsequently to the ..

  What is the firm optimal capital budget

The managers of United Medtronics are evaluating the following four projects for the coming budget period. The firm's corporate cost of capital is 14 percent.

  What is the bep

Cottage Industries Ltd expects to sell 500 baskets a month. The business has the opportunity to rent a basket-making machine. Doing so would increase the total fixed costs of operating the workshop for a month to £3,000. Using the machine would re..

  Pros and cons of investing directly in individual stocks

What are the pros and cons of investing directly in individual stocks or bonds versus investing indirectly through a mutual fund?

  What is the distinction between ethics and morality

What is the distinction between ethics and morality? How do moral obligations apply to business organizations?

  Percent per month on the overdue balance

A key supplier is behind on his accounts payable account. The agreed on repayment schedule is $500 per month. The interest charge is 1.4 percent per month

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