Risky future cash flows in her net-present-value analysis

Assignment Help Financial Management

Reference no: EM131451333

Your client is considering the acquisition of a small competitor; however, she is nervous about the purchase. What might she do to account account for risky future cash flows in her net-present-value analysis?

1. require a higher risk adjusted rate of return in the analysis

2. require a lower hurdle rate

3. project more conservative future cash flows

4. assume a higher earnings growth rate

a. 1 and 3

b. 2 and 3

c. 1 and 4

d. 3 and 4

Reference no: EM131451333

Questions Cloud

Determine the depreciation and book value for the hogs : Determine the depreciation and book value for the hogs for the first 3 years of ownership using the following depreciation methods.

What value would mm now estimate for each firm : What value would MM now estimate for each firm? Find SL, and then show that SL + D = VL results in the same value as obtained in part a.

The project will produce the same after-tax cash inflows : The project will produce the same after-tax cash inflows of 533,700 per year at the end of the year.

How much additional equity financing is required : If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?

Risky future cash flows in her net-present-value analysis : What might she do to account account for risky future cash flows in her net-present-value analysis?

What is the aftertax cost of debt : Jiminy's Cricket Farm issued a 30-year, 6.5 percent semiannual bond 7 years ago. What is the aftertax cost of debt?

What rights do you consider to be universal human rights : Does it surprise you that the UN considers copyright protection to be a "universal human right" and that plagiarism would be a human rights violation? Why or why not?

What is most important to you as a person : Once you have completed this exercise, what surprised you and didn't surprise you about your core values? What is most important to you as a person?

Explain the behavior of the board more or less ethical : HP Chairwoman Patricia Dunn defended the actions of the board by arguing that HP's higher standards of corporate integrity justified.

User Account

All Pages