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Summer Tyme, Inc. has cash available and is considering a new three-year expansion project that requires an initial fixed asset investment of $3.9 million. The fixed assets will be depreciated straight-line to zero over its three-year tax life. The fixed assets will have a market value of $200,000 at the end of the project. The project is estimated to generate following revenues during those three years: $2,000,000 for year one, $2,500,000 for year two, and $3,000,000 for year three. Costs are equal to 20% of the same yearsales. The project net working capital is equal to 10% of the next year's revenue. The tax-rate is 35%. What are the project's net cash flows for years 0-3? What is the IRR on this project?
Computation of Free cash flow for the company's depreciation expense is $500,000 and it has no amortization expense.
Which one of the following amounts increases each period when accounting for long-term notes payable?
Assume that the U.S and the Euro nominal interest rate are equal. Subsequently, the U.S. nominal rate decreases while the Euro nominal interest rate remains stable.
At what debt ratio is the company's WACC minimized? Round your answer to two decimal places.
stock r has a beta of 2.3 stock s has a beta of 0.30 the expected rate of return on an average stock is 9 and the
ABC Corporation will earn $60 if it does well. The debtholders are promised payments of $35 if the firm does well. If corporation does poorly, expected earnings will be $30 and the repayment will be $20 because of dead weight cost of bankruptcy.
Other information: risk free rate = 4.0%, the market risk premium = 6.5%, tax rate = 40.0%. Using the average of the CAPM and DCF estimates, find the required return on equity.
ABC's Balance Sheet lists Current Assets of $300, Current Liabilities of $200, Fixed Assets of $700, Long-Term Debt of $400. ABC has 200 shares outstanding. What is the market-to-book ratio (MTB) if the market price per share is $8?
Provide a definition of a term sheet and explain its purpose.
For the last 10 years you have been depositing a fixed amount into your savings account. You have been doing that once a year at the beginning of each year. You now have $35,000 in your account.
Alter Bridge Mfg., Inc., is currently operating at only 85 percent of fixed asset capacity. Current sales are $760,000. How fast can sales grow before any new fixed assets are needed?
what would be PP's new value of operations and what is the stock price per share immediately after issuing the debt but prior to the repurchase - What is the value of the firm according to MM with corporate taxes?
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