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Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 10%. 0 1 2 3 4 Project A -1,100 620 365 200 250 Project B -1,100 220 300 350 700 What is Project A's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations. $ What is Project B's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
Suppose a company has organic growth of 10% that doesn’t require investment. Current dividend is $4 and discount rate is 15%. If the share price is $200, what is the NPV of the managers’ ability to grow through acquisition?
O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 25 years. Their nominal yield to maturity is 9.25%, they pay interest semiannually, and they sell at a price of $975. What is the bond's nominal coupon interest rate?
Jackson Corp. common stock paid $2.50 in dividends last year (D0). Dividends are expected to grow at a 12-percent annual rate forever. If Jackson's current market price is $40.00, what is the stock's expected rate of return (nearest .01 percent)?
Renfro Rentals has issued bonds that have a 11% coupon rate, payable semiannually. The bonds mature in 8 years, have a face value of $1,000, and a yield to maturity of 9%. What is the price of the bonds?
An unlevered firm has a value of $900 million. An otherwise identical but levered firm has $50 million in debt at a 5% interest rate. Its cost of debt is 5% and its unlevered cost of equity is 12%. After Year 1, free cash flows and tax savings are ex..
Yolanda invests her $5,000 bonus into a high yield account that earns 6.7% simple interest. She wants to buy a Burmese Rabbit Hound with the money. The breeder told her that a puppy would cost $5,500. How long will Yolanda have to wait before she has..
Suppose that the annual interest rate is 1.5% in the US and 3% in Germany, the spot exchange rate is $1.57/€ and the forward exchange rate with one-year maturity is $1.58 /€. Assume that an arbitrator can borrow up to $1,000,000 with €625,000. If an ..
The U.S. law granting trade preferences to imports from the island nations of the Caribbean and Central America is called:
In the early 1990s, the California Air Resources Board (CARB) started planning its “Phase 2” requirements for reformulated gasoline (RFG). RFG is gasoline blended to tight specifications designed to reduce pollution from motor vehicles. CARB consulte..
Suppose you have a firm that faces a %50 tax rate. Suppose you have an increase in operating revenue of $25000 and an increase in operating expense of $30000, what is your change in net cash flow?
part ifor this part you must write 4 ndash 6 paragraphs about the capital budget items needed for a start up
Paul receives a 90-day letter after his meeting with and appeals officer. He is not satisfied with the $101,000 settlement offer. Briefly identify the relevant tax research issues facing Paul. The pertinent facts of both the case and the ruling match..
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