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!
Gemini, Inc., an all-equity firm, is considering an investment of $1.76 million that will be depreciated according to the straight-line method over its four-year life. The project is expected to generate earnings before taxes and depreciation of $610,000 per year for four years. The investment will not change the risk level of the firm. The company can obtain a four-year, 9.1 percent loan to finance the project from a local bank. All principal will be repaid in one balloon payment at the end of the fourth year. The bank will charge the firm $60,000 in flotation fees, which will be amortized over the four-year life of the loan. If the company financed the project entirely with equity, the firm’s cost of capital would be 12 percent. The corporate tax rate is 40 percent.
Using the adjusted present value method, calculate the APV of the project. (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
APV $
If the overall rate of inflation was positive over the life of your mortgage, what affect would that have on the REAL value of your debt (the mortgage)?
Garvin enterprises is considering a project that has the following cash flow and WACC data. What is the projects discounted payback? WACC: 8.00% Year0=-$1000 Year1=$500 Year2=$500 Year3=$500
Compute the net investment required to establish the collection subsidiary.- Compute the annual net cash flows over the 10-year life of the project.
The April 21, 2015 University Press reported that faculty salaries rose an average of 3.1% in the past year, but after adjusting for inflation, there was actually an average decrease of 0.3%. What was the rate of inflation?
A seller from the X Republic enters into a contract with a buyer from the Federation of Y. The contract stipulates that the CISG applies, but the X Republic and the Federation of Y are not member states. In a 2-3 page paper explain whether or not the..
Money is invested in a savings account with a nominal interest rate of 2.4% convertible monthly for three years. The rate of inflation is 1.5% for the first year, 2.8% for the second year, and 3.4% for the third year. Find the percentage of purchasin..
The director of Pele's R&D division strongly recommends further research in the laboratory to test the side effects of this chemical on other insects, birds, animals, plants, and even humans. He cautions the president, "We could be sued from all s..
What is the present value of an annuity of $7,100 per year, with the first cash flow received three years from today and the last one received 25 years from today? Use a discount rate of 7 percent.
We are now in 2015 and interest rates are still very low. There are plenty of analysts and industry professionals who argue this has not been the correct approach. Obviously, the Fed has disagreed.
Consider a three-year project with the following information: initial fixed asset investment = $710,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $34.75; variable costs = $22.90; fixed costs = $213,500; ..
Soprano’s Spaghetti Factory issued 29-year bonds two years ago at a coupon rate of 8.10 percent. If these bonds currently sell for 79.00 percent of par value, what is the YTM?
A Treasury bond that matures in 10 years has a yield of 4.25%. A 10-year corporate bond has a yield of 8%. Assume that the liquidity premium on the corporate bond is 0.3%. What is the default risk premium on the corporate bond? Round your answer to t..
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