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!
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer’s base price is $1,080,000, and it would cost another $22,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $605,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $15,500. The sprayer would not change revenues, but it is expected to save the firm $380,000 per year in before-tax operating costs, mainly labor. Campbell’s marginal tax rate is 35%. If the project’s cost of capital is 12%, should the machine be purchased? (Find the NPV)
Your portfolio allocates equal funds to the DW Co. and Woodpecker, Inc. DW Co. stock has an annual return mean and standard deviation of 10.5 percent and 45 percent, respectively. Woodpecker, Inc., stock has an annual return mean and standard deviati..
You own a stock portfolio invested 30 percent in Stock Q, 20 percent in Stock R, 35 percent in Stock S, and 15 percent in Stock T. The betas for these four stocks are .85, 1.18, 1.02, and 1.20, respectively. What is the portfolio beta?
Consider a European-style option with payoff at expiry given by A(s(T)) = S(T). Explain why time zero value of this option must be S0. By using (6.11) show that asking for the discount expected payoff (12.1) to match this value leads immediately to t..
After the 12th reduced payment, the loan is renegotiated. The revised level payment P will yield the lender 4% per year over the remaining 7 years. Find P.
Bill’s Bakery expects earnings per share of $2.18 next year. Current book value is $3.9 per share. The appropriate discount rate for Bill’s Bakery is 13 percent. Calculate the share price for Bill’s Bakery if earnings grow at 4 percent forever.
In a waiting line situation, arrivals occur around the clock at a rate of six per day, and the service occurs at one every three hours. Assume the Poisson and exponential distributions. Find average time in the waiting line.
DerivativeCo shares are currently trading at $100. The share price is expected to either increase by 5.5% or decrease by 4.5% by the end of 90 days. Given that the risk-free rate is 1.5%, determine the value of the 180-day call option with a strike p..
What are the annual cash flow savings, if any, from the proposed bond- refunding decision if (1) the new bonds have an 8 percent coupon interest rate and (2) the new bonds have a 9 percent coupon interest rate?
DiCapri Company is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, would be depreciated straight-line method over its 3-year life, and would have a zero salvage value. No new working capit..
A share of stock with a beta of .78 now sells for $58. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate is 5%, and the market risk premium is 8%. Suppose investors believe the stock will sell for $60 at year-end, is the st..
The Muse Co. just issued a dividend of $3.45 per share on its common stock. The company is expected to maintain a constant 7.10 percent growth rate in its dividends indefinitely. If the stock sells for $69 a share, what is the company’s cost of equit..
How did you select the companies for your portfolios? You don't have to give a list of every company and why, it should be in general. The detail should be in the appendix.
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