User Account

All Pages

Question regarding the tgif sportswear

Assignment Help Finance Basics
Reference no: EM131101155

TGIF Sportswear is considering expanding its T-shirt line. The project would last 3 years and has an initial investment of $200,000. The after-tax cash flows are estimated at $60,000 for year 1 and $120,000 for each of years 2 and 3. The firm has a target debt-to-equity ratio of 40 percent. Its cost of equity is 14% and its cost of debt is 7%. The tax rate is 34%. Should TGIF Sportswear expand its T-shirt line?

Reference no: EM131101155

Questions Cloud

Component cost of preferred stock : XYZ, Inc. sold a 10% perpetual preferred stock offering with a $100 par value. The amount the firm received after flotation costs was $98.50. What is the component cost of preferred stock?
What are the npv and irr of this project : What are the NPV and IRR of this project? Should this project be undertaken, ignoring environmental concerns? How should environmental effects be considered when evaluating this, or any other, project? How might these effects change your decision in ..
Calculate the payback period for each case : the following expected annual cash flows'$30,000 $40,000 $50,000 $60,000 and $70,000.required:calculate the payback period for each case.
Gulf weighted average cost of capital : The Gulf Company's cost of equity is 16 percent. Its before-tax cost of debt is 13 percent, its average tax rate is 40 percent. Gulf does not have any preferred equity. If it's debt ratio is 30 percent, find Gulf's weighted average cost of capi..
Question regarding the tgif sportswear : The firm has a target debt-to-equity ratio of 40 percent. Its cost of equity is 14% and its cost of debt is 7%. The tax rate is 34%. Should TGIF Sportswear expand its T-shirt line?
Which project has the higher mirr : whose costs and cash flows are shown below:The projects are equally risky, and their cost of capital is 12%. You must make a recommendation, and you must base it on the modified IRR (MIRR). Which project has the higher MIRR?
What are the documentation requirements with regard to taxes : What are the documentation requirements with regard to taxes and tariffs for international trade?
Write program called nprimes which takes single integer : E15: Fundamentals of Digital Systems - Fall 2010 - HOMEWORK 10. Write a program called nprimes which takes a single integer input n on the command line. It should produce as output the first n prime numbers, one on each line
What is the role of the companies creditor arrangement act : What is the role of the Companies' Creditor Arrangement Act with respect to developing contractual arrangements that fend off insolvency?

Reviews

Write a Review

Finance Basics Questions & Answers

  Required rate of return on equity

If Holland acquires Workman, it will increase the debt to 60%, at an interest rate of 9%, and the tax rate will increase to 35%. The risk-free rate is 6% and the market risk premium is 4%. What will Workman's required rate of return on equity be a..

  What value would frank estimate for the firm

Kent, a colleague of Frank at the same firm is less optimistic. Brett thinks the ABC company will begin paying a divident in 4 yrs and it will be $2.50 and it will grow at a rate of 3% annually. John and James agree that the required return for AB..

  What is the default risk premium on the corporate bond

A treasury bond that matures in 10 years has a yeild of 6%. A 10 year corporate bond has a yeild of 9%. Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?

  The hedge may reduce reported earnings prior

Which of the following types of contracts are generally excluded from SFAS 133 accounting rules (including fair market value adjustment rules)?

  Find the interest rate parity theorem

The one-year United State nominal interest rate is 4%. The one-year UK nominal interest rate is 2 percent. The indirect spot rate is currently 0.5350 Pounds per dollar.

  Finance-bond pricing

Compute the duration of this bond and use it to estimate the new value of the bond if rates were to suddenly decline by 0.80%. Calculate the bond's value directly (using the present value approach) assuming that rates declined 0.80% from the yield t..

  Included in your stock market game portfolio

Identify three stocks for potential inclusion in a large-cap diversified stock portfolio, conduct an analysis of the stocks, and make a recommendation for or again inclusion based on your analysis. To begin, choose three stocks from different ind..

  Which is the effective annual rate

Your auto finance company is quoting you an Annual Percentage Rate (APR) of 8%. You are borrowing $45,000 and the payment is $845 per month. You will make monthly payments. Which is the Effective Annual Rate (EAR)?

  The variance and standard deviation of an

the variance and standard deviation of an investmenta. increase as the riskiness of the investment increase.b. increase

  Calculate the total cost of ordering and carring inventories

The following inventory data have been established for the Stamps Company: 1. Orders must be placed in mulitples of 400 units. 2. Annual sales are 720,000 units 3. The purchase price Per unit from suppliers is $14.  4. Carrring cost is 30 percent of ..

  Which one of the following statements related to the nyse

Which one of the following statements related to the NYSE is correct?

  A project lost one-third of its value each year for 5

a project lost one-third of its value each year for 5 years. what was its rate of return and how much is left from a

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd