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Targaryen Aeronautics is exploring the possibility of making a significant purchase of a new alterative aircraft technology to add to their current fleet – a dragon. The purchase price of the dragon is expected to be $4,000,000 with additional shipping and installation expenses of $1,000,000. Maintenance of the dragon will require an increase in working capital of $2,000,000 (for feeding and care, etc.). The dragon is expected to generate additional annual sales of $2,500,000 (from aeronautical demonstration tickets) over the next four years, additional operating costs (not including depreciation) of $230,000, and depreciation each year according to the MACRS schedule of 33%, 45%, 15%, and 7%, respectively. Targaryen’s tax rate is 40%, and their required rate of return is 9.2%. Targaryen expects to be able to sell the dragon at the end of the project’s life for 20% of the original purchase price of the dragon, and they also expect to be able to recoup the original additional investment in working capital. The initial investment required for the dragon will be? Please show work.
Which statement about bond prices is most accurate?
How important is good governance and ethics for a firm? Provide answers with examples and theoretical explanations.
The Wheel Deal Inc., a company that produces scooters and other wheeled non-motorized recreational equipment is considering an expansion of their product line to Europe. The expansion would require a purchase of equipment with a price of €1,200,000 a..
Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the stock is selling at $20 a share. The broker charges a 10 percent annual interest rate, and commissions are 3 percent of the stock value on the purchase and sal..
Suppose that it is August 13, 2013 and that Pinnacle Partners plans to buy a Treasury bond that matures in May 2042. The bond pays coupons semi-annually on May 15 and November 15 of each year. The Ask quote for this bond is 112:18 and it pays an annu..
Watters Umbrella Corp. issued 20-year bonds 2 years ago at a coupon rate of 6.4 percent. The bonds make semi-annual payments. If these bonds currently sell for 110 percent of par value, what is the YTM?
This case analyzes the problems facing a bank in a foreign country and the reasons for deciding to stay or to close its operation. Royal Bank of Canada is the bank involved in this real life situation.
What is it like to work at Google? (Hint: Go to Google's website and click on "About Google'. Find the section on jobs at Google and go from there.) What is your assessment of the company's work environment?
Delta Corporation earned $2.50 per share during fiscal year 2011 and paid cash dividends of 1.00 per share. During the fiscal year that just ended on December 31, 2012, Delta earned $3.00 per share, and the firm’s managers expect to earn this amount ..
LaDoris & Mike, Inc. sells earnings forecasts for Chinese securities. It's credit terms are 1/5, net 15. Based on experience, 85 percent of all customers take the discount. What is the average collection period?
Specify the terms of the planned issue, determine the theoretical ex-rights price and the expected value of a right and demonstrate that in principle a shareholder holding 100 shares will be equally well off by subscribing to the shares or by sellin..
A small shopping center is expected to produce net operating income of $23,880 in year 1. You expect NOI to increase by 4 percent per year over an expected holding period of seven years. Property value is expected to increase by 3 percent per year. T..
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