Discounted cash flow techniques are capital budgeting techniques that take into account both the time value of money and the estimated net cash flow from an investment. How is the NPV calculated and what is the decision rule?
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Suppose that during a certain week the Fed announces a new monetary growth policy, Congress surprisingly passes legislation restricting imports of foreign automobiles, and Ford comes out with a new car model that it believes will increase profits sub..
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Paw Patrol is considering2 different capital structures. Structure A is 100% equity with 150,00 shares outstanding and $500,000 market value. Structure B is 50/50 debt/equity split with total market value of $500,00. Rate on debt will be 10%, assume ..
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Federal employment, as a percentage of all employment, began to decline in the 1970s. To know whether this signaled a philosophical move toward smaller government, what additional information would you want?
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You borrow $20,000 with an interest rate of 5% per year to purchase a car. You make 3 equal annual payments for 3 years, with the first payment due at the end of the 1st year. How much is each payment? What if the first payment is due today?
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Rocky Sales, Inc., has current sales of $1,268,864 and net income of $203,018. It also has a debt ratio of 47 percent and a dividend payout ratio of 69 percent. The company’s total assets are $587,439. What is its sustainable growth rate? (Round answ..
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The most recent financial statements for Dockett, Inc., are shown here (assuming no income taxes): Income Statement Balance Sheet Sales $ 8,400 Assets $ 14,000 Debt $ 6,000 Costs 6,390 Equity 8,000 Net income $ 2,010 Total $ 14,000 Total $ 14,000 Ass..
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If you have a rental property that is leased for $1,000 a month for the next 20 years, what could an investor pay for the property if their required rate of return was 11% (assume rent is collected at the end of each month)?
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A stock has an expected return of 18 percent, its beta is 1.45, and the risk-free rate is 4 percent. What must the expected return on the market be?
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You are the head of finance department in XYZ Company. You are considering adding a new machine to your production facility. The new machine’s base price is $10,900.00, and it would cost another $1,970.00 to install it. What is the initial cash outla..
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How do you solve for the long-term constant growth in FCF? The values I'm given in the problem are the current marketable securities, notes payable, long-term bonds, preferred stock, WACC, number of shares of stock as well as the projected free cash ..
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A large cow barn will cost $150,000 to build today and you figure it will add $18,000 per year to your after-tax cash flows for the next ten years. If the salvage value of the building is 50% after ten years and the cost of capital is 7%, what is the..
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