What is the profitability index given a required return

Assignment Help Financial Management
Reference no: EM13917538

Assume a project has cash flows of -$51,300, $18,200, $37,300, and $14,300 for years 0 to 3, respectively. What is the profitability index given a required return of 12.5 percent?

Reference no: EM13917538

Questions Cloud

Mortgage broker about obtaining a loan on new apartment : Lidan is going to meet with a mortgage broker about obtaining a loan on a new apartment she wants to buy. The apartment would cost her $325,000. Her credit score is 580. She would most likely borrow money in form of a…. (A) government loan (B) conven..
What was your total nominal rate of return on investment : Suppose you bought a bond with a coupon rate of 8.4 percent one year ago for $907. The bond sells for $946 today. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? What was your total nominal rate ..
What was the capital gains yield and dividend yield : Suppose a stock had an initial price of $96 per share, paid a dividend of $2.70 per share during the year, and had an ending share price of $77.50. Compute the percentage total return. What was the dividend yield? What was the capital gains yield?
The dividends are expected to grow at a consent rate : The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow at a consent rate of 4 percent per share indefinitely. If investors require a rate of return of 10.5 percent on The Jackson-T..
What is the profitability index given a required return : Assume a project has cash flows of -$51,300, $18,200, $37,300, and $14,300 for years 0 to 3, respectively. What is the profitability index given a required return of 12.5 percent?
What is the external financing need if the current sales : A firm has total assets of $162,000, long-term debt of $46,000, stockholders' equity of $95,000, and current liabilities of $21,000. The dividend payout ratio is 60 percent and the profit margin is 8 percent. Assume all assets and current liabilities..
During which time it receives an annual dividend : A common stock is held for two years, during which time it receives an annual dividend of $10. The stock was sold for $100 and generated an average annual return of 16%. What price was paid for the stock?
Solaris due to retained earnings-what does balance sheet : Betancourt International has operations in Arrakis. The balance sheet for this division in Arrakeen solaris shows assets of 24,000 solaris, debt in the amount of 8,000 solaris, and equity of 16,000 solaris. Assume the equity increases by 1,500 solari..
What must the expected return on this stock be : A stock has a beta of 1.28, the expected return on the market is 12 percent, and the risk-free rate is 4.5 percent. What must the expected return on this stock be?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the value of quick ratio

Clyde’s Smoke Shop has cash of $750, accounts receivable of $150, inventory of $300, and accounts payable of $600. What is the value of Clyde’s quick ratio?

  How does an ipo differ from a seasoned equity offering

How does an IPO differ from a Seasoned Equity Offering? When the underwriters are acting under a firm commitment, what services do they provide for the private company attempting their IPO? How are the underwriters compensated for such services?

  Target weights of debt-preferred and common equity

A company has target weights of debt, preferred and common equity of 20%, 10% and 70%, respectively. It has liquidation values of debt, preferred and common equity of 30%, 15% and 55%. Its book values of debt, preferred and common equity are 40%, 10%..

  How much would you pay for perpetuity which pays

How much would you pay for perpetuity which pays $500 (the first payment coming three years from today) every three years grows by 2% each payment? The discount rate is a 5% per year.

  What is the projected net income

A proposed new investment has projected sales of $837,000. Variable costs are 57 percent of sales, and fixed costs are $187,610; depreciation is $97,000. Assume a tax rate of 35 percent. What is the projected net income?

  What is the retailers effective cost of trade credit

A large retailer obtains merchandise under the credit terms of 1/15, net 45, but routinely takes 60 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's e..

  Compute the earnings per share and ratio

Stilley Corporation had earnings after taxes of $436,000 in 2013 with 200,000 shares outstanding. The stock price was $42.00. In 2014, earnings after taxes declined to $206,000 with the same 200,000 shares outstanding. The stock prices declined to $2..

  Effectively implement monetary policy

Why is it important for the economies of Europe to converge in order for the European Central Bank (ECB) to effectively implement monetary policy for Europe?

  Capital structure based on current market values

Capital Co. has a capital structure, based on current market values, that consists of 50 percent debt, 10 percent preferred stock, and 40 percent common stock. If the returns required by investors are 8 percent, 10 percent, and 15 percent for the deb..

  Experiencing rapid growth

Chartreuse County Choppers Inc. is experiencing rapid growth. The company expects dividends to grow at 15 percent per year for the next 8 years before levelling off at 6 percent into perpetuity. The required return on the company’s stock is 12 percen..

  Correlation coefficient between returns of the two stocks

The covariance of the returns between Willow Stock and Sky Diamond Stock is 0.0990. The variance is 0.2540, and the variance of Sky Diamond is 0.1370. What is the correlation coefficient between the returns of the two stocks?

  The initial cost of federal highway project

The initial cost of a federal highway project is $4 million. The road will require maintained at a cost of $50,000 a year during its 20 year life. If benefits of $300,000 a year have been identified, the B/C value at an interest rate of 6% a year is?

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