What is equivalent annual annuity of most profitable project

Assignment Help Financial Management
Reference no: EM13939689

Carlyle Inc. is considering two mutually exclusive projects. Both require an initial investment of $15,000 at t = 0. Project S has an expected life of 2 years with after-tax cash inflows of $7,000 and $12,000 at the end of Years 1 and 2, respectively. In addition, Project S can be repeated at the end of Year 2 with no changes in its cash flows. Project L has an expected life of 4 years with after-tax cash inflows of $5,200 at the end of each of the next 4 years. Each project has a WACC of 9.00%. What is the equivalent annual annuity of the most profitable project?

$ 569.97

$ 782.34

$ 865.31

$1,522.18

$1,846.54

Reference no: EM13939689

Questions Cloud

Information on relevant legal requirement on diversity : Provide a detailed information on relevant legal requirement on diversity that your workplace must consider. This must include all laws and regulations relating to diversity and how they apply to your specific workplace.
Instances of medical identity theft : Select three websites (give the URLs) that provide useful information about the concepts of the articles and the instances of medical identity theft in relation to mitigating the impact of the theft.
Minimum simple size the researcher needs to use : A researcher is interested in studying people's mean age in a certain region. If the population standard deviation is known to be 8 years and 1.5 year of error margin is allowed, find the minimum simple size the researcher needs to use, knowing th..
Purpose of the program is to help reduce readmissions : The purpose of the program is to help reduce readmissions for recurrence of CHF and decrease costs associated with multiple admissions and the resources needed to treat these patients
What is equivalent annual annuity of most profitable project : Carlyle Inc. is considering two mutually exclusive projects. Both require an initial investment of $15,000 at t = 0. Project S has an expected life of 2 years with after-tax cash inflows of $7,000 and $12,000 at the end of Years 1 and 2, respectively..
Which are the excitatory and inhibitory ones : Describe the different classes of neurotransmitters, including the amino acids, catecholamines and indolamines. Which are the excitatory and inhibitory ones?
Calculate the discount rate used by the lender : Calculate the discount rate used by the lender. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)Discount rate %
Define each work design tools : Define each of the following work design tools and provide an example of how/when each might be used in health information management:
Project on network security : Can you do project on network security any topic it can be practical/ theoretical / or survey. it has to be 8-12 pages long and follow the IEEE journal standard and also need to show or demo or code or whatever the product is.

Reviews

Write a Review

Financial Management Questions & Answers

  Most recent financial statements

In its most recent financial statements, Newhouse Inc. reported $60 million of net income and $1,020 million of retained earnings. The previous retained earnings were $969 million. How much in dividends were paid to shareholders during the year? Assu..

  Management expects this lack of growth to continue

Knight Supply Corp. has not grown for the past several years, and management expects this lack of growth to continue. The firm last paid a dividend of $4.25. If you require a rate of return of 15.5 percent, what is the current value of this stock to ..

  What is the portfolios expected return

A portfolio is invested 23 percent in Stock G, 38 percent in Stock J, and 39 percent in Stock K. The expected returns on these stocks are 10 percent, 12.5 percent, and 17.9 percent, respectively. What is the portfolio’s expected return?

  Communications is new firm in rapidly growing industry

Combined Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 23 percent a year for the next 4 years and then decreasing the growth rate to 4 percent per year. The company just paid ..

  What is total profit or loss on the option investment

Suppose the option in the previous question is a put rather than a call. All of the values stated are the same for the put option. What is your total profit or loss on the option investment?

  Benefit of tax deductibility of interest payments

In using asymmetric information, it could be explained that businesses maintain a reserve borrowing capacity to take advantage of good investment opportunities and, at the same time, avoid having to issue stock at distressed prices that will discoura..

  Issue of preferred stock-what is the required return

Moraine, Inc., has an issue of preferred stock outstanding that pays a $3.15 dividend every year in perpetuity. If this issue currently sells for $92 per share, what is the required return?

  Effective annual return on its consumer loans

Magnus Credit Corp. wants to earn an effective annual return on its consumer loans of 15.5 percent per year. The bank uses daily compounding on its loans. What interest rate is the bank required by law to report to potential borrowers?

  About the monthly payment

You want to buy a new sports car from Muscle Motors for $68,000. The contract is in the form of a 72-month annuity due at an APR of 6.75 percent. What will your monthly payment be?

  What is the firms weighted average cost of capital

Phillips Equipment has 80,000 bonds outstanding that are selling at par. Bonds with similar characteristics are yielding 6.75 percent. The company also has 750,000 shares of 7 percent preferred stock and 2.5 million shares of common stock outstanding..

  Prepare contribution format income statement for the year

Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $200. What is the company’s break-even point in terms of the number of barbecue grills sold? Assume that the company uses variable costing. Compute..

  What was the most recent dividend per share paid on stock

Secolo Corporation stock currently sells for $68 per share. The market requires a return of 11 percent on the firm's stock. If the company maintains a constant 3.75 percent growth rate in dividends, what was the most recent dividend per share paid on..

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd