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!
A firm must choose from six capital budgeting proposals outlined below. The firm is subject to capital rationing and has a capital budget of $1,000,000; the firm's cost of capital is 15 percent.
Project Initial Investment IRR NPV
1 $200,000 19% $100,000
2 $400,000 17% $20,000
3 $250,000 16% $60,000
4 $200,000 12% $-5,000
5 $150,000 15% $50,000
6 $400,000 15% $150,000
1. Using the internal rate of return approach to ranking projects, which projects should the firm accept?
2. Using the net present value approach to ranking projects, which projects should the firm accept?
A 2-year long forward contract on a non-dividend-paying stock is entered into when the stock price is $139 and the risk-free interest rate is 10.3% per annum with continuous compounding. 1 year later, the price of the stock is $146 and the risk-free ..
What is operating income? What is net income, and how does it differ from operating income? Why is net income called the bottom line? What is the difference between net income and cash flow?
Calculate the after-tax cost of debt under each of the following conditions: Interest rate of 8%; tax rate of 0%. Round your answer to two decimal places.
Provide an overall explanation for your firm, include your financial analysis and the other information above? Is this firm a good long-term or short-term investment, or neither?
You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.29 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?
Draw a time line to show the cash flows of the project and compute the project's payback period, net present value, profitability index, and internal rate of return.
You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $21,000 to purchase and which will have OCF of –$2,600 annually throughout the vehicle’s expected life of three years as..
Set up an amortization schedule for a $42,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 6% compounded annually. Round all answers to the nearest cent. What percentage of the payment represent..
A British investor holds a portfolio of British stocks. The market value of the portfolio is £20million, with a ? of 1.5 relative to the FTSE index. In November, the spot value of the FTSE index is 4,000. The dividend yield and pound interest rates a..
Ramstucky Corp bonds just paid their annual coupon of 4%. They mature in 6 years. The required rate of return on the bonds is 5%. So it’s a $10,000 bond selling for $9,000. The call price of the bonds is 102, but they are not callable until after the..
It is now January 1. You plan to make a total of 5 deposits of $600 each, one every 6 months, with the first payment being made today. The bank pays a nominal interest rate of 10% but uses semi annual compounding. You plan to leave the money in the b..
If a portfolio had a return of 15%, the risk-free asset return was 5%, and the standard deviation of the portfolio's excess returns was 30%, the Sharpe measure would be ______ .
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