Calculate the opportunity cost of the land

Assignment Help Financial Management

Reference no: EM13927595

Blackstone, Inc. is considering expanding operations. The company owns a lot near the present facility on which a new building can be constructed. The land was purchased 10 years ago for $50,500 and now has a market value of $106,900. Assuming a tax rate of 20%, calculate the opportunity cost of the land

a. $95,620

b. $79,460

c. $56,040

d. $11,280

Reference no: EM13927595

Questions Cloud

What portfolio of options and risk-free asset : What portfolio of options and risk-free asset (if any) can be used to replicate the payoffs of a forward contract on IBM stock with 9 months to maturity? Assume the forward price satisfies no-arbitrage pricing. IBM stock currently trades for $90/shar..

Corporation with taxable income : A corporation with a taxable income of $50 million is considering a new venture that would generate an additional $500,000 per year in taxable income. How much additional federal income tax will they pay on this additional income?

Which project does a risk averse manager prefer : Project A generates $5,000.00 in revenue two years from today and costs $4,000.00. Project B generates $4,000.00 (50% probability) or $6,000.00 (50% probability) one year from today and costs $4,500.00. Assuming a discount rate of 12% for both projec..

Calculating portfolio betas : Calculating Portfolio Betas You own a stock portfolio invested 10 percent in Stock Q , 35 percent in Stock R , 20 percent in Stock S , and 35 percent in Stock T. The betas for these four stocks are .75, 1.90, 1.38, and 1.16, respectively. What is the..

Calculate the opportunity cost of the land : Blackstone, Inc. is considering expanding operations. The company owns a lot near the present facility on which a new building can be constructed. The land was purchased 10 years ago for $50,500 and now has a market value of $106,900. Assuming a tax ..

Excess cash to complete a stock repurchase : A firm has a market value equal to its book value. Currently, the firm has excess cash of $700 and other assets of $6,300. Equity is worth $7,000. The firm has 400 shares of stock outstanding and net income of $684. What will the new earnings per sha..

What is cost of equity-how does function in cost of capital : What is cost of equity and how does it function in the cost of capital? To increase a firm’s value, results should show your WACC is moving in which direction? What are those skills?

What is the net result of increasing the cash discount : Fizzy Animators, Inc. currently makes all sales on credit and offers no cash discount. The firm is considering a 3 percent cash discount for payment within 10 days. The firm's current average collection period is 90 days, sales are 400 films per year..

User Account

All Pages