Reference no: EM131088048
Consider the following cash flows for three mutually exclusive projects. What is the IRR of the project you should accept? Assume an interest rate of 12% Year A B C 0 −$950,000 −$1,790,000 -$1,000,000 1 370,000 800,000 660,000 2 510,000 800,000 550,000 3 420,000 750,000 340,000 What is the IRR of the project the company should adopt? this should be done in excel.
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Operating cash flow of the project using tax shield approach
: A project will increase sales by $60,000 and cash expenses by $41,000. The project will cost $40,000 and be depreciated using straight-line depreciation to a zero book value over the 4-year life of the project. The company has a marginal tax rate of ..
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Securities or creating distinctive two-factor portfolios
: Jane is considering investing in three different securities or creating three distinctive two-factor portfolios. Determine, using the appropriate Excel function the covariances between securities A&B; B&C; A&C. Determine the betas Security A, a utili..
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What is its self-supporting growth rate
: Maggie's Muffins, Inc., generated $2,000,000 in sales during 2013, and its year-end total assets were $1,100,000. Also, at year-end 2013, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..
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Vehicle expected life of three years as delivery vehicle
: You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $18,000 to purchase and which will have OCF of –$2,000 annually throughout the vehicle’s expected life of three years as..
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Cash flows for three mutually exclusive projects
: Consider the following cash flows for three mutually exclusive projects. What is the IRR of the project you should accept? Assume an interest rate of 12% Year A B C 0 −$950,000 −$1,790,000 -$1,000,000 1 370,000 800,000 660,000 2 510,000 800,000 550,0..
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What is the project payback period if the initial cost
: An investment project provides cash inflows of 200, 400, 670, 890, 1130, 1040, 880, 740, 530, 200, 110, 30 each year starting in year 1. What is the project payback period if the initial cost is $5,600? this must done in excel.
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Risk-free rate have to for two stocks to be correctly priced
: Stock Y has a beta of 1.2 and an expected return of 15.3 percent. Stock Z has a beta of 0.8 and an expected return of 10.7 percent. What would the risk-free rate have to be for the two stocks to be correctly priced?
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Decision contradict the normal backwardation theory
: Suppose the basis spread, S-F, is falling. How can you use this fundamental information to take an investment decision in iotions and swaps? Further, does your decision contradict the normal backwardation theory of keynes? why or why not?
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What is the portfolio beta
: You own a stock portfolio invested 24 percent in Stock Q, 21 percent in Stock R, 44 percent in Stock S, and 11 percent in Stock T. The betas for these four stocks are .86, .92, 1.32, and 1.77, respectively. What is the portfolio beta?
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