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An investment project has annual cash inflows of $4,500, $3,800, $5,000, and $4,200, for the next four years, respectively. The discount rate is 15 percent.
1) What is the discounted payback period for these cash flows if the initial cost is $5,600?
2) What is the discounted payback period for these cash flows if the initial cost is $7,700?
3) What is the discounted payback period for these cash flows if the intitial cost is $10,700?
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Evil Pop, Inc., has an average collection period of 29 days. Its average daily investment in receivables is $69,300. Assume 365 days per year. What is the receivables turnover? What are annual credit sales?
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Jet Corporation expects an EBIT of $26,500 every year forever. The company currently has no debt, and its cost of equity is 15 percent. The corporate tax rate is 35 percent. Suppose the company can borrow at 10 percent. What will the value of the fir..
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The local home improvement store has a washing machine on sale for $601, with the payment due in 2 years from today. The store is willing to discount the price at an annual rate of 9 percent (compounded annually) if you pay today. What is the amount ..
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A firm is valued at $8 million and has debt of $2 million outstanding. The firm has an equity beta of 1.5 and a debt beta of .60. The beta of the overall firm is:
An analyst believes that a stock for a large company has a beta of 1.4. The 10 year government bond rate is 4%, and the analyst expects the return on the S&P500 to be 12%. Using the capital asset pricing model, the analyst would estimate the required..
Nancy Marchand purchased a put option on British pounds for $.04 per unit. The strike price was $1.80 and the spot rate at the time the pound option was exercised was $1.59. Assume there are 31,250 units in a British pound option. What was Nancy’s ne..
What will $5,000 invested for 10 years at 8 percent compounded annually grow to? How many years will it take $400 to grow to $1,671 if it is invested at 10 percent compounded annually? At what rate would $1,000 have to be invested to grow to $4,046 i..
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