1. Cash flows from a new factory are expected to be $3,000,000 per year, every year for the next ten (10) years. If investor's use 6.25% as the discount rate, calculate the present value of this investment.

2. Parker Corporation is planning to break ground on a new factory. The factory will require an initial cash outlay of $5,000,000 which will be due in September 2020 (five years). How much will Parker need to deposit, or set a-side every quarter, for the next 5 years (60 months), in an account that earns 9.35%, in order to have the funds available for this outlay (investment).

## Free cash flows-determined that the EV-EBITDA for the firmNext year free cash flows for the AA company is expected to be $10 million. It is expected to grow for the following two years at 10% and then for 9% for the following year. You have determined that the EV/EBITDA for the firm in year 5 is expected to.. |

## The restraint of trade clauseMark worked as route manager for United Trucks Pty Ltd in Queensland from 2003-10. A term of his contract was that if he should leave the company, he could not engage in the trucking industry in Queensland for six years. Mark comes to you for advice .. |

## What will be the net cash flow from the saleThe Wise Co. purchased a new truck two years ago for $56,000. The company uses MACRS depreciation for accounting purposes. The truck is classified as 5-year property, which has depreciation allowances of 20%, 32%, and 19.20% for the first three years.. |

## What is the firms net incomeAssume that Wiley Health System, a for-profit hospital, has $1,000,000 in taxable income for 2015, and its tax rate is 30 percent. What is the firm's net income? |

## What is the APR and EAR of your investmentYou bought a stock six months ago for $80.82 per share. The stock paid no dividends. The current share price is $86.59. What is the APR and EAR of your investment? |

## Assume spending will continue at the same rateYour project is progressing well in your estimation. Your team has collected the following data. From these data, calculate the project’s ETC. Activity A is 60% complete at a cost so far of $50,000. It was estimated to cost $200,000 when finished. It.. |

## Expected return on the risk free securityA friend says that she expects to earn 13.50% on her portfolio with a beta of 2.00. You have a two- asset portfolio including stock X and a risk free security. The expected return of stock X is 11.00% and the beta is 1.10. The expected return on the .. |

## How economic conditions affect the default risk premiumDo you think the default risk premium will likely increase or decrease during the next 6 months? How do you think the yield curve will change during this time? Offer some logic or current reference(s) to support your answers. |

## What is the amount of expected disbursements for quarterWeisbro and Sons purchase their inventory one quarter prior to the quarter of sale. The purchase price is 60 percent of the sales price. The accounts payable period is 60 days. The accounts payable balance at the beginning of quarter one is $27,600. .. |

## Highly effective to qualify for special financial treatmentAll hedging relationships must be “highly effective” to qualify for special financial treatment. What is meant by the term highly effective and why is its measurement important for financial managers? |

## Annual return mean and standard deviationTyler Trucks stock has an annual return mean and standard deviation of 8 percent and 27 percent, respectively. Michael Moped Manufacturing stock has an annual return mean and standard deviation of 19.0 percent and 63 percent, respectively. |

## What is additional funds needed for the coming yearThe Booth Company’s sales are forecasted to double from $1,000 in 2013 to $2,000 in 2014. Here is the December 31, 2013, balance sheet: Booth’s fixed assets were used to only 50% of capacity during 2013, but its current assets were at their proper le.. |

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