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Projects A and B, of equal risk, are alternatives for expanding Rosa Company's capacity. The firm's cost of capital is 13%. The cash flows for each project are shown in the following table. a.) calculate each project's payback period. b.) calculate the net present value for each project. c.) calculate the internal rate of return for each project. d.) draw the net present value profiles for both projects on the same set of axes, and discuss any conflict in ranking that may exist between NPV and IRR. e.) Summarize the preferences dictated by each measure, and indicate which project you would recommend. Explain why. Project A Project B Initial investment $80,000 $50,000 Year Cash Flows 1 $15,000 $15,000 2 $20,000 $15,000 3 $25,000 $15,000 4 $30,000 $15,000 5 $35,000 $15,000 Please help me. I need solutions please.
callaghan Motors' bonds have 10 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 8%, and the yield to maturityis 9%. What is the bond's current market price?
Compute the dividends, net of capital contribution, for 2006. Compute ROCE, use average net book value in the denominator.
Assume the company places orders during each quarter equal to 45 percent of projected sales for the next quarter. How much will the firm pay its suppliers in quarter 3 if the firm has a 60-day payables period?
If the first constraint is altered to X + 3Y
The firm yhas a taxrate of 35%,an opportunity of cost of capital of 15% and it expects net working capital to increase by $100,000 at the beginning of the project. What will the year 0 free cash flows for the project be?
what would your return have been if you had invested $1,000 in Big's stock instead of the bond?
The weighted average cost of capital for a firm (assuming all three Modigliani and Miller assumptions apply) is 15 percent. What is the current cost of equity capital for the firm if its cost of debt is 8 percent and the proportion of debt to tota..
During the last year, Delta Co had Net Income of $159, paid $15 in dividends, and sold new stock for $30. Beginning equity for the year was $670. What was the ending equity?
Why are firms even allowed to do it under GAAP? Is it ethical? What are the implications for cash flow an shareholder wealth?
The exercise price on one of ORNE Corporation's call options is $35 and the price of the underlying stock is $34. The option will expire in 55 days. The option is currently selling for $0.25.
How much will each annual payment be? What ratios would be impacted by extra debt? How would you give explanation for this purchase to management?
What is a FAIR plan? How does it work? If underwriting losses of FAIR plans are passed on to other insureds, is this mandated subsidization? Explain your conclusions.
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