Npv of project using free cash flows to the firm

Assignment Help Financial Management

Reference no: EM132061467

1. Why is WACC a reasonable discount rate to use when estimating the NPV of a project using free cash flows to the firm?

Given following information, what is the companys ROE?

Debt 5: 60%

Tax Rate: 35%

Earnings before interest and tax: $20,000

Interest Rate: 8%

Assets: $160,000

A. 12.098%

B. 12.153%

C. 13.116%

D. 13.867%

2. Provide 2 comments on the following statement: the reason we are seeing fewer market creating innovations is because using NPV and IRR to make capital budgeting decisions will result in only accepting projects with short payoff periods.

Reference no: EM132061467

Questions Cloud

How much would you loan : If someone offered to give you a $500,000 noninterest-bearing note that was due 5 years from today, how much would you loan

What is the net cash provided by investing activities : Acquired land by issuing common stock of par value $100,000. What is the net cash provided (used) by investing activities

Create a executive summary of stocking : Create a 2-page executive summary explaining to your staff the significant of stocking, placing timely orders, and provide a step by step method.

What is the exact real interest rate : Given a nominal interest rate of 6.6% and inflation of 2.4%, what is the exact real interest rate?

Npv of project using free cash flows to the firm : Why is WACC a reasonable discount rate to use when estimating the NPV of a project using free cash flows to the firm?

What are the different classifications of accounts : What does the term account mean? What are the different classifications of accounts? How do the rules for debits and credits impact accounts

Infrastructure finance with real estate mortgage finance : Comparing infrastructure finance with real estate mortgage finance, which of the following statement is not true?

Compare leadership development and management development : HRMD650 Compare and contrast leadership development and management development. What interventions might you use to develop leaders and managers.

Describe the likely federal income tax consequences : ubal owns an older office building in a part of town that has seen better days. Describe the likely federal income tax consequences of Eve's offer

User Account

All Pages