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!
Daniel Kaffe, CFO of Kendrick Enterprises, is evaluating a 10-year, 6.3 percent loan with gross proceeds of $5,870,000. The interest payments on the loan will be made annually. Flotation costs are estimated to be 2.7 percent of gross proceeds and will be amortized using a straight-line schedule over the 10-year life of the loan. The company has a tax rate of 34 percent, and the loan will not increase the risk of financial distress for the company.
a. Calculate the net present value of the loan excluding flotation costs. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Net present value $
b. Calculate the net present value of the loan including flotation costs. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $317,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it ..
You are considering an investment opportunity that costs $250,000 and will return 14% on your investment. There are higher returning investments available in the financial markets that are comparable to this investment opportunity in terms of risk. H..
The past five monthly returns for PG&E are −3.49 percent, 4.68 percent, 4.09 percent, 6.95 percent, and 3.90 percent. Compute the standard deviation of PG&E’s monthly returns.
Angela analyzes her personal budget and decides that she can reduce her recreational spending by $50 per month. How much will that increase her annual savings? What will her annual savings be now?
Bond J has a coupon rate of 3 percent and Bond K has a coupon rate of 9 percent. Both bonds have 17 years to maturity, make semiannual payments, and have a YTM of 6 percent. If interest rates suddenly rise by 2 percent, what is the percentage price c..
Travel America Coaches currently sells 15,000 motor homes per year at $94,000 each, and 1,500 luxury motor coaches per year at $159,000 each. The company wants to introduce a low-range camper to fill out its product line; it hopes to sell 6,000 of th..
Automated Manufacturers uses high-tech equipment to produce specialized aluminium products for its customers. Each one of these machines costs $1,480,000 to purchase plus an additional $49,000 a year to operate. The machines have a 6-year life after ..
A firm has agreed to borrow $750,000 at a simple interest rate of 6% for 30 days to meet its short-term funding needs. The bank charges a loan processing fee of $1,000. What is the effective annual rate on this loan?
The Rodriguez Company is considering an average-risk investment in a mineral water spring project that has a cost of $155,000. The project will produce 950 cases of mineral water per year indefinitely. The current sales price is $144 per case, and th..
Compute the means and covariances of the rates of return on these three assets. - Draw the efficient frontier if you can only invest in VEURX and VPACX.
Find the Macaulay duration and the modified duration of a 20 year, 12.0% corporate bond priced to yield 10.0%. According to the modified duration of this bond, how much of a price change would this bond incur if market yields rose to 11.0%. Using ann..
Find out which countries have joined the euro area recently or are likely to join soon. Why are these countries joining while others in the European Union are still left out?
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: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd