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Please post your completed file(s) to the Case Study #3 folder in Blackboard before you leave class today. Make sure I have received your file(s).Each work is your own; please reference any sources when required. The Case work represents 15% of your total course grade.Capital Budget AnalysisBased on the inputs below prepare a capital budget analysis for this Base Case using the Net Present Value, Internal Rate of Return and Profitability Index determining whether the project is feasible. Please show your spreadsheet calculations and your final determinations of "go" or "no go" on the project.Project Inputs:WACC - the cost of capital (hurdle rate) will be the current yield of the 10 Year U.S. Treasury Note: as of Friday July 18 2014 the yield was 2.54%, plus 630 basis points.Project Investment Outlay, Year 0 - $500,000 Project Investment Life - 10 yearsProject Depreciation - $50,000 / yearProject Salvage Value - $20,000Working Capital Base of Annual Sales - 10%Expected inflation rate per year, Selling Price Per Unit - 5%Expected inflation rate per year, Manufacturing Cost per unit - 3.5% Expected inflation rate per year, Fixed operating costs per year - 2.5% Project Tax Rate - 30%??Bus 530 Case 3: HasseInputs continued:Units sold per year - 20,000Selling Price per Unit, Year 1 - $75Fixed operating costs per year excluding depreciation - $250,000 Manufacturing costs per unit, Year 1 - $33.75Scenario Analysis:Base Case Scenario - 20,000 units sold per year - 57% probability Worst Case Scenario - 10,000 units sold per year - 25% probability Best Case Scenario - 30,000 units solder per year - 18% probabilityPrepare a scenario analysis once you have completed your original discounted cash flow analysis. Is the project still a "go" or "no go"?Sensitivity Analysis:In addition to the above, also prepare a sensitivity analysis based on the following variables -Deviation from the Base: -20%, -10%, 0%, +10%, +20%Sensitivity Variables: (1). Selling Price per Unit, (2). Manufacturing Cost per Unit, (3). Depreciation.Please show the range in the NPVs for each variable and chart the analysis. Which variable has the highest risk and which variable has the lowest risk? Explain.??
Justify the term Bond valuation where would sell for a premium if interest rates were below 9 percent and would sell for a discount if interest rates were greater than 11 percent
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Morgan Jennings, a geography professor, invests $50,000 in a parcel of land that is expected to increase in value by 12 percent per year for the next five years. He will take the proceeds and provide himself with a 10-year annuity a 12 percent int..
Axel Telecommunications has a target capital structure that Problems consists of 70 percent debt and 30 percent equity. The company anticipates that its capital budget for the 13 upcoming year will be $3,000,000.
Random sample is attained from normal population with the mean of µ = 80 and standard deviation of σ = 8. Which of the following outcomes is more probable? Describe your answer.
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Four months ago, you purchased 1,500 shares of Lakeside Bank stock for $11.20 a share. You have received dividend payments equal to $0.25 a share.
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Computation of amount of insurance using needs approach and Capital Retention approach
Assume a particular investment earns a return of 10% in year 1, -5% (note MINUS 5%) in year 2, and 30 percent in year 3.
Assess the likely impact of the rupiah's depreciation on Bakrie's three different businesses. Which of Bakrie's businesses will be most hurt by the rupiah's fall? Will any of these businesses actually benefit from rupiah depreciation?
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