Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Question :
(a) Lucky Corporation is considering an investment in one of the two mutually exclusive proposals: Project A which involves an initial outlay of Rs 170,000 and Project B which has an outlay of Rs 150,000. The Certainty Equivalent Approach is employed in computing risky investments. The current yield on treasury bills is 0.05 and the company uses this as the riskless rate. The evaluated values of net cash flows with their respective certainty equivalents are:
Required:
i. Which Project could be acceptable to the company?ii. Justify which Project is riskier? iii. If the company was to use the risk adjusted discount rate method, which Project could be analysed with higher rate?
(b) If the required rate is 10 percent, evaluate the present value of the cash flow streams detailed below:
I. Rs 100 at the end of year 1. II. Rs 100 at the end of year 4. III. Rs 100 at the end of year 3 and year 5. IV. Rs 100 for the next 10 years ( for years 1 through 10).
(c) Miss. Kiran has in her possession 300 preference shares of Cintex company Ltd, which currently sells for Rs 400 per share and pays an annual dividend of Rs 34 per share.
I. Determine Miss Kiran's expected return. II. If Miss Kiran needs an 8 per cent return, given the price, should she sell or buy more stock.
Which currency has to be used in an international acquisition in order to calculate the flows? It can be completed in the local currency or in the currency of the parent compan
OTC refers to financial securities whose sale and purchase are not conducted over a stock exchange.
What is an LBO? What are the risks for the equity investors and what are the potential rewards? A leveraged buyout is a buy of a publicly owned corporation by a small group of
WHY ORDINARY SHARES DIFFER IN DIFFERENT COMPANIES
Q. What do you mean by S Corporation? S Corporation - An S Corporation is a corporation that, under Internal Revenue Code, is normally not subject to federal income taxes. In i
What is the meaning of Over-capitalisation It is the opposite of over trading. It means a company has a large volume of inventories, trade receivables and cash balances though
State about the Quick ratio or acid test Quick ratio = Current assets less inventories /Current liabilities(times) This ratio measures immediate solvency of a busin
In bootstrapping method, on-the-run treasury issues are used as they are fairly priced, and there is no credit risk or liquidity risk involved. In practice observed yie
Cash flow analysis helps an analyst to identify certain financial difficulties which cannot be identified using the above ratios. A firm may be shown
Cash flow from investing activities The items included in this heading are: Cash payments Cash receipts Acquiring proper
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd