User Account

All Pages

Considering a new project

Assignment Help Finance Basics
Reference no: EM131975440

Swizer Industries has two separate divisions. Division X has less risk so its projects are assigned a discount rate equal to the firm's WACC minus .75 percent. Division Y has more risk and its projects are assigned a rate equal to the firm's WACC plus 1 percent. The company has a debt-equity ratio of .48 and a tax rate of 34 percent. The cost of equity is 15.4 percent and the aftertax cost of debt is 5.4 percent. Presently, each division is considering a new project. Division Y's project provides a return of 12.9percent while Division X's project is expected to earn 11.5 percent. Which project(s), if any, should the company accept?

Reference no: EM131975440

Questions Cloud

Discuss net working capital : Discuss Net Working Capital and explain managing the net working capital how (2) areas are related to the firm's operations.
Determine the annual dividend for each year : If the firm's dividend policy was based on a fixed dollar payout policy of 50 cents per share plus an extra dividend equal to 75 percent of earnings per share.
Explain the hedging principle : Explain the Hedging Principle and how firms can benefit from hedging when negotiating deals, as for an example; stocks, bonds, and purchases of goods
Calculate the break-even sales revenue for sandoval : Calculate the contribution margin ratio. Round your answer to the nearest whole number. Calculate the break-even sales revenue for Sandoval
Considering a new project : Division Y's project provides a return of 12.9percent while Division X's project is expected to earn 11.5 percent. Which project(s), if any, should the company?
Calculate the after tax salvage value : Your firm needs a machine which costs $190,000, and requires $34,000 in maintenance for each year of its 3 year life.
What are the issues concerning short-term financing : What are the issues concerning Short-Term Financing? Give a reason why companies may utilize short-term financing.
Compute the proceeds of the note : On September 1, Nova Salon Company issued a 120-day note with a face amount. Compute the proceeds of the note, assuming the note carries an interest rate of 8%.
What is change in operating income for furniture division : Required: What is the change in operating income for the Furniture Division? Round your answer to the nearest dollar, if required

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd