Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Suppose a company has hired you to estimate the cash flows arising from a proposed capital project by replacing old equipment with a $0 market value and a book value of $6000, and you have been handed the relevant data below. The project being considered has a 5-year tax life, and at the end of year 5 the asset will be worthless (i.e. salvage value =0). The CFO suggests that you depreciate the asset by using the straight-line method over the 5 year life of the project. Revenues and other operating costs are as noted below, and will be constant over the period. Equipment cost: $150,000; Book value of old equipment: $6000 Delivery and installation cost of equipment and remove old equipment: $50,000; Straight-line depreciation rate: 20% (5-year); Sales revenue each year: $100,000 Operating costs (excluding depreciation): $30,000; Tax rate: 40% 10a. What are annual cash flows for the next five years? Hint: find CF0 to CF5 10b. Suppose CFO will borrow 50% of capital from a bank with 10% interest, and 50% of capital through equity with 22% of require rate of return. What is the cost of capital for this project? 10c. What is the net present value of this project and should you convince the CFO to accept or reject the new equipment? 10d. If the firm's CEO want to use IRR to value the project, will IRR has the same suggestion as NPV? (please find IRR, and explain what it means)
Calculation of expected return, beta, coefficient of variation, standard deviation and required rate of return
Firm's operating as well as cash conversion cycles and decision on speeding up collections
The owners of a new venture have decided to organize as a corporation. The initial equity investment is valued at $100,000, reflecting contributions of the entrepreneur and her family and friends. One hundred thousand shares of stock were initiall..
Diane has separate property valued at $75,000 and Sam has separate property valued at $90,000. If Diane were to die intestate in Texas, how much will each of her children receive from Diane's estate?
Consider a firm with 80 shareholders, including yourself, who each owns 1 share worth $10. In addition, How would this change the value of the share?
The 12-month, 15-month, 18-month zero rates are 4.5%, 4.6%, 4.7% with continuous compounding. What is the value of an FRA that enables the holder to earn 5.7% (with semiannual compounding) for a 3-month period starting in 1 year on a principal of $1,..
Suppose you have been asked to write a report for a group of new stock brokers about the American Stock Exchange and the NASDAQ.
Suppose that one-year zero-coupon US Treasury bonds with a $10,000 face value are currently selling for $9,852.
What is the likely differential incidence of substituting a payroll tax for an equal-yield corporate income tax?
Stan Fawcett's company is planning producing a gear assembly that it now purchases from Salt Lake Supply, Corporation Salt Lake Supply charges $4 per unit with a minimum order of 3,000 units.
Establish an estimated growth rate in earnings & dividends for British Petroleum. Note, in the dividend growth model, "g" is growth rate for earnings & dividends.
A project has the following cash flows: What is the NPV at a discount rate of zero percent?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd