User Account

All Pages

High roller properties is considering building a new casino

Assignment Help Finance Basics
Reference no: EM13540743

High roller properties is considering building a new casino at the cost of $10 million at t=0. The after-tax cash flows the casino generates will depend on whether the state imposes a new income tax, and there is a 50/50 chance that the tax will pass. If it passes, after-tax cash flows will be $1.875 million per year for the next 5 years. If it doesn't pass, the after-tax cash flows will be $3.75 million per year for the next year. The project's WACC is 11%. If the tax is passed the firm will have the option to abandon the project 1 year from now, in which case the property could be sold to net $6.5 million after tax at t=1. What is the value (in thousands) of this project considering the abandonment option?

Reference no: EM13540743

Questions Cloud

How much would the wacc change : Minuteman Mountain Tours currently has zero debt. Now the company is considering using some debt, moving to a 55% debt, 45% equity financed firm. The interest rate on the new debt would be be 7% and the company's tax rate is 40%. It is estimate..
Yield to maturity on bond : The yield to maturity on this bond when it was issued was 6%. Use this information for Problems 16-18 - Is this bond currently trading at a discount, at par, or at a premium? Explain.
Find the final speed and direction of the apple : Two astronauts on opposite ends of a space ship are comparing lunches. One has an apple, the other has an orange. They decide to trade. Find the final speed and direction of the apple
Evaluate the freezing point of the solution : At 298K, the osmotic pressure of a glucose solution is 10.50 atm. Calculate the freezing point of the solution if the density is 1.16g/mL.
High roller properties is considering building a new casino : High roller properties is considering building a new casino at the cost
Calculate the resulting angular speed of the platform : A man stands on a frictionless platform that is rotating with an angular speed of 2.3 rad/s; his arms are outstretched and he holds a weight in each hand. what is the resulting angular speed of the platform
Create the current assets section of the balance sheet : Koch Corporation's adjusted trial balance contained the following asset accounts at December 31 - Prepare the current assets section of the balance sheet
Evaluate the concentration of nitrogen in water : The solubility of pure nitrogen in water at 1 atm and 25 degress Celsius is 6.8E-4 M. Calculate the concentration of nitrogen in water under atmospheric conditions where the partial pressure of nitrogen is 0.78 atm.
Define what is the enthalpy of formation of co(g) in kj : What is the enthalpy of formation of CO(g) in kJ. 2CO(g) + O2(g) --> 2CO2(g). H reaction = -566 kJ ; ?H CO2(g) =-393.5 kJ/mol.

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