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Dunay Corporation is considering investing $925,000 in a project. The life of the project would be 7 years. The project would require additional working capital of $42,000, which would be released for use elsewhere at the end of the project. The annual net cash inflows would be $194,000. The salvage value of the assets used in the project would be $52,000. The company uses a discount rate of 12%. (Ignore income taxes.)
Compute the net present value of the project. (Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount. Omit the "$" sign in your response.)
Buner Corp.’s outstanding bonds, which have a face value of $1,000, have 6 years remaining to maturity. The bond’s coupon rate of interest is 8%, and interest is paid semi annually. If investors require a rate of return equal to 12% to invest in simi..
You purchase 500 shares of 2nd Chance Co. stock on margin at a price of $53. Your broker requires you to deposit $10,000. Suppose you sell the stock at a price of $44. What is your return? What would your return have been had you purchased the stock ..
Oberon, Inc., has a $40 million (face value) 10-year bond issue selling for 97 percent of par that pays an annual coupon of 8.15 percent. What would be Oberon’s before-tax component cost of debt? (Round your answer to 2 decimal places.) Cost of debt ..
The growth rate for the firm's common stock is 7%. The firm's preferred stock is paying an annual dividend of $5. What is the preferred stock price if the required rate of return is 8%?
You estimate that your cattle farm will generate $.30 million of profits on sales of $6 million under normal economic conditions and that the degree of operating leverage is 4. (Leave no cells blank - be certain to enter "0" wherever required. What w..
Show that a curve on the unit cylinder that intersects the straight lines on the cylinder parallel to the z-axis at a constant angle must be a straight line, a circle or a circular helix
Broussard Skateboard's sales are expected to increase by 15% from $8.2 million in 2013 to $9.43 million in 2014. Its assets totaled $3 million at the end of 2013. Broussard is already at full capacity, so its assets must grow at the same rate as proj..
The preferred stock of Er Railroad Ties pays an annual dividend of $8.20 and sells for $51.70 a share. What is the rate of return on this security?
The ThisInstructorIsSoNice Company expects to have net income of $18 million for the year, and to pay out $3 million in dividends to common stockholders. There is no preferred stock. What is the expected "addition to retained earnings" for the year?
RAK Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 –$ 28,000 1 10,200 2 12,900 3 14,800 4 11,900 5 – 8,400 The company uses a discount rate of 13 percent and a reinvestment rate of 6 percent on all of its projects.
A firm has current assets that could be sold for their book value of $40 million. The book value of its fixed assets is $78 million, but they could be sold for $108 million today. The firm has total debt with a book value of $58 million, but interest..
You have just borrowed $100,000 to buy a condo. You will repay the loan in equal monthly payments of $804.62 over the next 30 years. What monthly interest rate are you paying on the loan? What is the APR? What is the effective annual rate on that loa..
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