Find out the value to the firm and wacc , Basic Statistics

1. HV Inc. is trying to determine the optimal time to undertake a product expansion. The project will require an initial investment of $15M and the firm has a WACC of 3%. The expansion is estimated to last 8 years, and if it is undertaken today, the annual cash flows associated with it will be $2.25M. Due to anticipated product adoption throughout the industry, it is estimated that the annual cash inflows will increase by 2% annually. What is the optimal time to undertake the product expansion and what is its value to the firm? 

2. PAC Corp. is going to purchase a new line of technology. It will cost $4M and will be salvaged for $0.5M in six years. Due to the advanced nature of the technology, it can be classified in one of two CCA categories, which have a CCA rate of 20% and 40%, respectively. Which CCA rate should you choose and what is the net benefit to the firm? Assume that PAC Corp. has a marginal tax rate of 35% and a WACC of 6%.

 

 

Posted Date: 3/1/2013 12:07:57 AM | Location : United States







Related Discussions:- Find out the value to the firm and wacc , Assignment Help, Ask Question on Find out the value to the firm and wacc , Get Answer, Expert's Help, Find out the value to the firm and wacc Discussions

Write discussion on Find out the value to the firm and wacc
Your posts are moderated
Related Questions
mr.sunil join as a new business partner and borrowed rs. 850000 from ansul investment co. and depoisted the money into a uti bank account on 1-4-2006.

is about deductions

what are the importances of time series

A Shoe manufacturing company designs a new shoe (Brand A) and it wanted to compare its fit with that of the leading brands in the market Nike and Reebok. 27 Customers were asked to

I have a box that measures 3m x 3m x 3m. What is the volume of the cube?


A probability distribution is partially given in the following table with the additional information that the even values of X are equally likely. Determine the missing entries in

What is job costing? Definition of job costing, Job costing usually, it is the allocation of all material, time & expenses to an individual project or job. Particularly, Jobs costi

To illustrate the importance of model selection. We will use only the first four observations to estimate the function f such that ini t. h = f(h. d) for two different models.

1. Passive losses are fully deductible as long as they do not exceed $50,000 during the year. A) True B) False 2. Wages are considered "active income." A) True B) False 3. A de