Evaluate the project using us cash flows

Assignment Help Finance Basics
Reference no: EM132481294

You want to invest in a project in Canada that has an initial cost of C$812,000 and is expected to produce cash inflows of C$340,000 a year for three years. The project will be worthless after the three years. The risk-free rate in Canada is 4 percent while it is only 3 percent in the U.S. The applicable interest rate for the project in Canada is 12 percent. Assume the current spot rate is C$1 = $.7874. What is the WACC you should use if you want to evaluate the project using US cash flows? Please show your work.

Reference no: EM132481294

Questions Cloud

Determine transactions into the appropriate ledger accounts : Determine and Place the transactions into the appropriate Ledger accounts. Selected activity of Mason Consulting Services follow.
Monetary instruments and fiscal policies : What alternative (to Quantitative Easing) monetary instruments and fiscal policies can be used to deal with an economic crisis
What accounting issues can find : What accounting issues can you find. Peak Perceptions Ltd. (PPL) provides "technology solutions" to manufacturing companies.
Estimate that he could negotiate a contract : The scout believe, however, that Landon will be a much higher draft pick if he improves by playing out his eligibility. If he stays at the university
Evaluate the project using us cash flows : What is the WACC you should use if you want to evaluate the project using US cash flows? Please show your work.
Determine and select if the costs are direct or indirect : Determine and Select if the costs are direct or indirect. Determine the total cost of each trip. Baird Airlines is a small airline that occasionally carries
What is the present value of eliminating the float : The applicable daily interest rate is .028 percent. What is the present value of eliminating the float? Assume each month has 30 days. Please show your work.
What is the effective interest rate : The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1.
Determine the total cost of each trip : Baird recently purchased an airplane that cost the company, Determine the total cost of each trip. Select if the costs mentioned below are direct or indirect.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the amount of the change in firms operating cash

A cost-cutting project will decrease costs by $58,500 a year. The annual depreciation on the project's fixed assets will be $10,300 and the tax rate is 34 percent. What is the amount of the change in the firm's operating cash flow resulting from t..

  Find the elasticities for each independent variable

Compute the elasticities for each independent variable. Determine the implications for each of the computed elasticities for the business in terms of short-term and long-term pricing strategies. Provide a rationale in which you cite your results.

  What is the effective annual rate charged on this car loan

Bobby Brown finds he can get 2.0% APR Financing if he elects the cash back option. What is the effective annual rate charged on this car loan? What would be Bobby Brown's monthly payment under this loan?

  Determine the ending inventory balances

Jobs24-A and 24-C were completed during the first week of July. No additional materials costs were incurred, but Job 24-A required $960 more of direct labor, and Job 24-C needed an additional $1,610 of direct labor. Job 24-A was composed of 1,200 ..

  Make a deposit into a savings account

During Jack's first year at college, his father had been sending him $100 per month for incidental expenses. For the sophomore year, his father decided instead to make a deposit into a savings account on August 1 and have his son withdraw $100 on ..

  Describe the management objectives of a firm

Describe the management objectives of a firm governed by the shareholder wealth maximization model and one governed by the stakeholder wealth maximization model.

  Compute the initial cash flow

Your business is considering a 3-year project, which requires an initial investment in equipment of $1, 500,000. The equipment will be depreciated straight-line

  Trade-offs between risk and expected return

Obtain current and past financial statements for a firm of your choice. Critically evaluate the policies regarding capital structure pursued by that firm.

  What is the yield to maturity of the august treasury bond

What is the yield to maturity of the August 2005 Treasury bond? Compare the yield to maturity and the current yield. How do you explain this relationship ?

  Best estimate of the 2006 financial statements

What is your best estimate of the 2006 financial statements? (Please complete the highlighted portion of the attached spreadsheet titled "Class Worksheet

  Relation between major parties in corporation-shareholders

Describe the roles and the basic relationship between the major parties in a corporation-shareholders, board of directors and ceo-including their responsibilities and appointment is made for the latter two. How are corporate owners compensated?

  What is the beta of apples business assets

Apple Computer had no debt, total equity capitalization of $128 billion, and a (equity) beta of 1.7 (as reported on Google Finance). Included in Apple’s assets was $25 billion in cash and risk-free securities. Assume that the risk-free rate of intere..

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!

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