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You own an oil pipeline that will generate a $3.6 million cash return over the coming year. The pipeline's operating costs are negligible, and it is expected to last for a very long time. Unfortunately, the volume of oil shipped is declining, and cash flows are expected to decline by 4.5% per year. The discount rate is 12%.
a. What is the PV of the pipeline's cash flows if its cash flows are assumed to last forever? (Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
b. What is the PV of the cash flows if the pipeline is scrapped after 16 years? (Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
a. What is Progressive's cost of equity and corporate cost of capital now? b. According to MM with corporate taxes, what is the optimal level of debt?
you were recently hired as management director of the new i can business incorporated icbi. you have been asked to
Read the Making the Connection short case titled Adam Smith's Famous Account of the Division of Labor in a Pin Factory in Chapter 11 of our textbook
Assuming that sales, operating costs, assets, the interest rate, and the tax rate would all remain constant, by how much would the ROE change in response to the change in the capital structure?
At a discount rate of? 7.50%, how large must the annual annuity payments be to make you indifferent between the two? choices?
ACC00716 Finance - What does the use of commercial paper suggest about the credit risk of Telstra - What asset financing policy does the quote
Briar Corp is issuing a 10-year bond with a coupon rate of 7 percent. The interest rate for similar bonds is currently 9 percent. Assuming annual payments, what is the present value of the bond? (Round to the nearest dollar.)
What are the dominant and recessive factors according to Gregor Mendel explanation to genetics?
Thirsty Cactus Corp. just paid a dividend of $1.30 per share. The dividends are expected to grow at 23 percent for the next eight years and then level off to a growth rate of 6 percent indefinitely. If the required return is 12 percent, what is th..
It can be sold today for $18,000. What is the estimated after-tax cash flow if the equipment is sold today? The tax rate is 30%.
Suppose the correlation coefficient between A and B was -1.0. How should Frane Ltd invest its funds in order to obtain a zero risk portfolio?
answer the following five questions on a separate document. explain how you reached the answer or show your work if a
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