What is the projected net present value of project

Assignment Help Financial Management
Reference no: EM131942901

ABC co. is analyzing a project with an initial cost of $110,000 and cash inflows of $63,000 in year 1 and $74,000 in year 2. This project is an extension of the firms current cooperation’s and thus is equally as risky as the current firm. The firm uses only debt and common stock to finance its operations and maintains a debt-equity ratio is 12.7%, tax rate is 35%. What is the projected net present value of this project?

Reference no: EM131942901

Questions Cloud

What is appropriate yield-to-maturity : What is the appropriate yield-to-maturity or discount rate to value Global Motor’s bond issue?
European call option on the futures with strike price : What is the value of a 6-month European call option on the futures with a strike price of 40?
What is the black-scholes equation to govern this situation : What is the Black-Scholes equation to govern this situation? What is the value of the option?
Result satisfies black-scholes-merton differential equation : Show that this result satisfies the Black-Scholes-Merton differential equation.
What is the projected net present value of project : What is the projected net present value of this project?
Boundary condition of this equation for european put option : What is the boundary condition of this equation for a European put option when t =T.
Markets follow the weak form of market efficiency : If markets follow the weak form of market efficiency, then all mutual fund managers will outperform the S&P 500.
The increasingly mobile and massive consumer market : In Europe the airlines and railway sectors are competing for the travel needs of the increasingly mobile and massive consumer market.
Value of red hawk enterprises as an all equity firm : What us the value of Red hawk Enterprises as an all equity firm? What is the cost of equity for the levered firm?

Reviews

Write a Review

Financial Management Questions & Answers

  Why price ratio considered a gauge of future earning power

Why does a relatively new firm often have a low dividend payout ratio? Why does a firm with a substantial growth record and/or substantial growth prospects often have a low dividend payout ratio?

  Examine the predictability of the standard deviation

Using graphs, examine the predictability of the standard deviation of each currency and the predictability of the correlation between the two currencies.

  Total market value of the firm without leverage

You are an entrepreneur starting a biotechnology firm. What is the total market value of the firm without leverage?

  The impact of repealing the sarbanes oxley act

what do you think the impact of repealing the Sarbanes Oxley Act would be?

  Ranks the after-tax component costs of capital

Which of the following correctly ranks the after-tax component costs of capital from the least to the greatest in magnitude?

  Assuming an inflation rate of compounded monthly

Assuming the nominal rate of 9% compounded monthly, and assuming an inflation rate of 4% compounded monthly,

  Calculate the taxable equivalent yield for this investment

Assume you are in the 29 percent tax bracket and purchase a 5.2 percent municipal bond. Calculate the taxable equivalent yield for this investment.

  Stock repurchase announcement will increase stock price

Additional problem: The equity of a certain company has a market value for $3 million. It currently has 300,000 shares outstanding, and a book value of equity of $1,095,000. If management estimates that a stock repurchase announcement will increase s..

  Expected returns and standard deviations of stocks

Suppose the expected returns and standard deviations of Stocks A and B are E(RA) = .096, E(RB) = .156, σA = .366, and σB = .626. alculate the expected return of a portfolio that is composed of 41 percent Stock A and 59 percent Stock B when the correl..

  What is the? firm current? roe

What is the? firm's current? ROE? If the firm increased its net profit margin to 3.68%?, what would be its? ROE?

  Assume the coupon payments are reinvested

How many bonds does Timmy need to buy so that he can have $155,297 in five year? Assume the coupon payments are reinvested at 9%.

  Move up or down and the longer is bond term

As interest rates move up or down and the longer is a bond's term. Determine the common stock for Bertinelli Corp. based on the following information:

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