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Assignment
1. Cost of Capital An MNC has total assets of $100 million and debt of $20 million. The firm's before tax cost of debt is 12 percent, and its cost of financing with equity is 15 percent. The MNC has a corporate tax rate of 40 percent. What is this firm's cost of capital?
2. Assessing Foreign Project Funded with Debt and Equity Nebraska Co. plans to pursue a project in Argentina that will generate revenue of 10 million Argentine pesos (AP) at the end of each of the next 4 years. It will have to pay operating expenses of AP3 million per year. The Argentine government will charge a 30 percent tax rate on profits. All after-tax profits each year will be remitted to the U.S. parent and no additional taxes are owed. The spot rate of the AP is presently at $.20. The AP is expected to depreciate by 10 percent each year for the next 4 years. The salvage value of the assets will be worth AP40 million in 4 years after capital gains taxes are paid. The initial investment will require $12 million, half of which will be in the form of equity from the U.S. parent and half of which will come from borrowed funds. Nebraska will borrow the funds in Argentine pesos. The annual interest rate on the funds borrowed is 14 percent. Annual interest (and zero principal) is paid on the debt at the end of each year, and the interest payments can be deducted before determining the tax owed to the Argentine government. The entire principal of the loan will be paid at the end of year 4. Nebraska requires a rate of return of at least 20 percent on its invested equity for this project to be worthwhile. Determine the NPV of this project. Should Nebraska pursue the project?
Evaluate what is the size of the annual payment the family must make if the fund is to supply obrey with above estimates?
interest expensenbspnbspnbspnbspnbspnbspnbspnbspnbsp 2000nbspnbspnbspnbspnbspnbspnbspsales revenuenbsp
As a financial manager be interested in doing business in this country-Growth Rate of GDP, both current and historical
Analyze the ethical violations of the company you researched. Discuss the consequences that you believe to be appropriate for the senior management of the firm you researched and the implications for brokers trading in high-risk investments.
What are the ethical considerations in this case (what is Andrea's dilemma)? What interested parties (stakeholders) are harmed or benefited by the situation?
During your time at Rocky, did you ever present work copied off the Internet as your own? Yes/No. During your time at Rocky, did you ever copy answers off another student's exam? Yes/No
Ignore those IPO without issue price in the spreadsheet downloaded from DatAnalysis. Also, make sure you select the adjusted price for the closing price. Describe the sample selection process.
what goes up/down and by how much? Remember that the balance sheet equation will still balance after the changes.
Everyone wants to get paid for their work. However, sometimes companies don't receive timely payments from customers and must write-off amounts. What are the different ways to account for write-offs?
Explain briefly: total risk, diversifiable risk and market risk and why are these concepts important and Moerdyk Company's stock has a beta of 1.40, the risk-free rate is4.25%, and the market risk premium is5.50%.What is the firm's required rate of r..
How would you protect yourself against his retirement, assuming you don't want to sell the shares today and calculate the value of all future dividends at the beginning of year and what is the present value of P7 at the beginning of year 1
How would you have suggested Gov. Blagojevich comport himself publicly, while the charge against him were pending?
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