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The Hardaway Corporation plans to lease a $810,000 asset to the O’Neil Corporation. The lease will be for 11 years. Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. If the Hardaway Corporation desires a return of 13 percent on its investment, how much should the lease payments be? (Do not round intermediate calculations and round your answer to 2 decimal places.) Lease payment $ b. If the Hardaway Corporation is able to take a 10 percent deduction from the purchase price of $810,000 and will pass the benefits along to the O’Neil Corporation in the form of lower lease payments (related to the Hardaway Corporation in the form of lower initial net cost), how much should the revised lease payments be? The Hardaway Corporation desires a return of 13 percent on the 11-year lease. (Do not round intermediate calculations and round your answer to 2 decimal places.) Revised lease payment $ HintsReferenceseBook & Resources WorksheetDifficulty: Challenge
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A firm has a $100 million capital budget. It is considering two project, each costing $100 million. Project A has an IRR of 20%; has an NPV of $9 million; and will be terminated after 1 year at a profit of $20 million, resulting in an immediate incre..
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What is the price of a European call option on a non-dividend-paying stock when the stock price is 65, the strike price is $60, the risk-free interest rate is 12% per annum, the volatility is 30% per annum, and the time to maturity is three months?
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