Provide after-tax operating cash inflows

Assignment Help Financial Management
Reference no: EM131089221

1) what is the IRR(%) for the following project if its initial after tax cost is 5,000,000 and its is expected to provide after-tax operating cash inflows of 1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3, and 1,300,000 in year 4?

a) 15.57 b)17.55% c) 13.57% d)15.75% e) none of the above

2) the current annual dividend of a compnay is $1.25/ share and the firm's required return is 12% dividends are expected to grow at 8% annually for three years, followed by a 5% constant annual growth rate. what is the firm's market value per share?

a) 19.21 b) 12.91 c) 29.11 d) 18.93 e) none of the bove

Reference no: EM131089221

Questions Cloud

What is the firm cost of equity : Wicd Co. just paid its first annual dividend of $.60 a share. The firm plans to increase the dividend by 1.5 percent per year indefinitely. What is the firm's cost of equity if the current stock price is $9.87 a share?
Find the holding period return : On January 1, Nina has a portfolio value of $10,000. On March 1, Nina adds $3,000 of new funds to her portfolio. At the end of the year, Nina has received $200 in dividends, $100 in interest, and the assets in her portfolio have grown in value by $1,..
What is the most vivid instance you can recall : What is the most vivid instance you can recall, from ?rsthand experience, when a company was hurt by its bungling of the mode issue? How would you account for what the company did? What is the single thing you could do that would have the best chance..
Invest money in the development of a microbiological product : A company has to decide whether to invest money in the development of a microbiological product. The company’s research director has estimated that there is a 60% chance that a successful development could be achieved in two years. What implications ..
Provide after-tax operating cash inflows : what is the IRR(%) for the following project if its initial after tax cost is 5,000,000 and its is expected to provide after-tax operating cash inflows of 1,800,000 in year 1, $1,900,000 in year 2, $1,700,000 in year 3, and 1,300,000 in year 4?
Operating profit or loss associated with the production : The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $70.44. The variable cost per unit is $20.34, Poseidon Swim has average fixed costs per year of $24713. What would be the operating profit or lo..
Different department found in a firm : Finance and Marketing are two different department found in a firm, should their be merged to form one department?
Net working capital investment : Suppose you also know that the firm's net capital spending for 2014 was $1,390,000, and that the firm reduced its net working capital investment by $73,000. What was the firm's 2014 OCF?
Discuss two flaws with using the irr : Please discuss the following questions. Answers need to be at minimum 150 words and include citations and references if needed. Discuss two flaws with using the IRR. Describe the concept of Relative Purchasing Power Parity.

Reviews

Write a Review

Financial Management Questions & Answers

  Applying results to both unlevered and levered firms

When calculating WACC and applying the results to both unlevered (no debt) and levered (debt) firms, the levered firm is shown to be more valuable. Two identical firms and the firm with debt is more highly valued. Does this make sense? Why or Why not..

  Calculate the accounting break-even point in units

We are evaluating a project that costs $680,000, has a five-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 64,000 units per year. Price per unit is $46, vari..

  Project breakeven and profitability measures

Describe the following project breakeven and profitability measures. Be sure to include each measure's economic interpretation.

  Risk-free rate have to for two stocks to be correctly priced

Stock Y has a beta of 1.2 and an expected return of 15.3 percent. Stock Z has a beta of 0.8 and an expected return of 10.7 percent. What would the risk-free rate have to be for the two stocks to be correctly priced?

  Perpetuity with a coupon payment

What price would investors be willing to pay for a perpetuity with a coupon payment of $20,000 per year if interest rates were 5%? What if interest rates were 2%? Please show your work.

  Sample proportions distribution with normal distribution

About 74% of Freddie Mac-owned loans were refinanced in the second quarter of 2005 (USA Today, Lifeline, August 3, 2005), resulting in new mortgages carrying loan amounts at least 5% above the original mortgage balance. Determine if the sample size f..

  Find the initial value of the investment-including options

Kasugai Corporation bought 350 shares of AIG stock at $49.30 per share. At the same time, it sold call options on 200 shares with exercise price $50.00, expiring after 72 days, at $3.50 per share. Kasugai also sold calls on 100 shares, with exercise ..

  What is your total dollar return on this investment

Four months ago, you purchased 1,200 shares of LBM stock for $9.30 a share. Last month you received a dividend payment of $.065 a share. Today, you sold the shares for $8.62 a share. What is your total dollar return on this investment?

  Explain the characteristics of line of credit

Explain the characteristics of a line of credit. What is it about these loans that make them by far the most popular type of short-term credit? When the economy is growing at a slow pace, it puts a damper on production and sales. This is due to the f..

  Operating-investing or financing cash outflow or inflow

Identify whether each of the following is an operating, investing, or financing cash outflow or inflow or if it is a noncash flow, under GAAP.

  What is the effective annual rate

Big Dom’s Pawn Shop charges an interest rate of 26.5 percent per month on loans to its customers. Like all lenders, Big Dom must report an APR to consumers. What rate should the shop report? What is the effective annual rate?

  Stock market provided the higher real rate of return

The Costaguanan stock market provided a rate of return of 95%. The inflation rate in Costaguana during the year was 80%. In the United States, in con-trast, the stock market return was only 12%, but the inflation rate was only 2%. Which country’s sto..

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd