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Zayn Transporters has determined that a new specialised delivery truck needs to be purchased. The truck will generate a positive net present value NPV of R780 000, calculated using the company's WACC of 19%. The truck can be leased from the manufacturer. The lease agreement requires 5 annual end of year payments of R280 500 with annual maintenance cost amounting to R40 000. Alternatively, the truck can be purchased at a cost of R1.25 million, inclusive of a 5-year maintenance contract with the manufacturer. The truck can be depreciated straight-line over the same period and will have a zero-market value at the end of 5 years. Insurance costs are expected to be R2 000 per month over the 5 years. You may assume that the current corporate tax rate is 28% and the after-tax cost of debt is 13%.
1. Determine the after-tax cash flows and the net present value of the cash outflows under each alternative.
2. Briefly indicate which alternative should be recommended.
If the researcher uses an exclusively between-subjects design, how many individuals participate in the entire study?
what are some of the external and internal factors that affect a firm's stock price? What is the difference between these two types factors?
If built property has a 4% risk premium in its expected total return (9% total return), what is the risk premium and expected total return for the land parcel?
Calculating Float. In a typical month, the Gulley Corporation receives 100 checks totaling $59,200. These are delayed three days on average.
obtain a current issue of the federal reserve bulletin or review of copy from the feds web site www.federalreserve.gov
Ben Bernanke, former chairman of the Federal Reserve, suggested a decade and a half ago that the collective 'savings glut'
the mkworld airline system is composed of the european and african routes each of which requires 10 aircrafts. these
Assume the following information for Pexi Co., a U.S.-based MNC that is considering obtaining funding for a project in Germany.
Assume that because the new debt will be issued at par, the required yield to maturity will be 0.15 percent higher than the value determined in part a. Add this factor to the answer in a.
A put option with a current value of $7.80. Both options written on the same stock, with 1 year until expiration, and a strike price of $44.00.
A firm reports sales of $1,048,900.00, Cost of Goods (COGS) of $598,600.00, Selling and Administrative expense of $99,150.00, and depreciation expense
The investor wants to earn a 13% interest rate on this investment. Compute the possible apartment building value today. [constant growth model CH8].
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