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!
Monhegan Computers is considering whether to begin offering customers the option to have their old personal computers recycled when they purchase new systems. The recycling system would require Monhegan to invest $580,000 in the grinders and magnets used in the recycling process (that is at t=0). The company estimates that for each system it recycles, it would generate $1.50 in incremental revenues from the sale of scrap metal and plastics. The recycled computers will cost the firm nothing, but it will cost the firm $0.20 per unit to dispose of the toxic elements from the recycled computer. The firm expects to use the recycling equipment for five years, and at t=5 sell the recycling equipment for $20,000. The machinery will be depreciated at the five-year MACRS depreciation schedule. (The MACRS depreciation schedule for a five year life is: year 1-20%, year 2-32%, year 3-19.2%, year 4-11.52%, year 5-11.52%, year 6-5.76%. Note that a five year life lasts 6 years because of the half year convention for the first year, but the machinery is sold at t=5.) During the life of the machine no new capital expenditures or investments in working capital will be required. Monhegan estimates that in the first year of the recycling project, it could recycle 110,000 PCs and that this number will grow by 25% per year over the remaining four-year life of the recycling equipment. Monhegan uses a 18% discount rate to analyze capital expenditures and pays taxes equal to 30%. You must calculate the PFCFs. What is the project's NPV?
Explain how an increase in the interest rate in Europe would affect the interest rate in the United States and the dollar-euro exchange rate under the theory of Interest Parity Condition. What factors does this theory leave out?
Define the agency problem, and discuss how to resolve it from the perspective of a stockholder. Is now the time to invest in long term bonds? If not, why not? Has Starbucks breached its fiduciary duty to shareholders by investing its profits in free ..
FASB 115 requires certain classifications within a bank's securities portfolio. What is the accounting treatment of securities within each classification? Describe why full market- value accounting might adversely affect a bank's reported capital. Ho..
What factors may lead an organisation to change the level of inventories that it holds? How could such a decision affect the other elements of working capital?
Consider three risk free Eurobonds (which pay coupons annually). Their times to maturity, coupon rates and current market prices (based on a face value of$100) are as follows: Bond A 1 yr 9% $101.25; Bond B 2 yrs 8% 99.75; Bond C 3 yrs 7% $96.00.
An investor buys a $1,000, 20 year 7 percent (interest paid semiannually) bond at par. After five years have passed, interest rates are 10 percent. How much did the investor lose on the purchase of the bond?
Risk-free rate is 3% and that the market risk is premium is 5%. What is the required rate of return on a stock with a beta of 0.9? What is the required rate of return on a stock with a beta of 2.1? What is the required return on the market?
King Tool Company is expected to pay a dividend of $2 in the upcoming year. The risk-free rate of return is 4% and the expected return on the market portfolio is 14%. Analysts expect the price of Sure Tool Company shares to be $22 a year from now. Th..
A chain of appliance stores, APP Corporation, purchases inventory with a net price of $200,000 each day. The company purchases the inventory under the credit terms of 2/15, net 30. APP always takes the discount, but takes the full 15 days to pay its ..
Syntex is considering an investment in one of two stocks. Given the information that follows, which investment is better, based on the risk (the standard deviation) and return?
ue and Clark have a contract by which Sue agrees to buy all of her office supplies from Clark for a year. Frequently, however, Clark delivers late, delivers pens that don’t write and a product altogether unsatisfactory to Sue. Sue just wants to end t..
Prepare a brief report (3–5 paragraphs) on how equity financing compares to debt financing. What factors need to be considered when choosing an appropriate method? What advantages/disadvantages exist with each type?
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