Kolby’s Korndogs is looking at a new sausage system with an installed cost of $538,000. This cost will be depreciated straight-line to zero over the project’s four-year life, at the end of which the sausage system can be scrapped for $114,000. The sausage system will save the firm $202,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $60,000.

Required:

If the tax rate is 40 percent and the discount rate is 9 percent, what is the NPV of this project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

NVP: ?

## What is the magnitude of your arbitrage profitYou are given the following information: at t = 0, the price of a 10?year zero coupon bond with FV = $10,000 is $7,000; the price of a 3?year zero coupon bond with FV = $5,000 is $4,300; f3,12 = 6%. A bank is offering the following product: What is t.. |

## Calculate the covariance between the returns of stockGiven the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.10 and 0.18, respective.. |

## How much will you pay for the companys stock todayCaan Corporation will pay a $3.02 per share dividend next year. The company pledges to increase its dividend by 5.5 percent per year indefinitely. If you require a return of 10 percent on your investment, how much will you pay for the company’s stock.. |

## Determine the beta of one security by regressing the returnsDetermine the beta of one security by regressing the returns for the share on the returns for the FT ALL Share Index and determine the co-variances for each pair of securities in the portfolio |

## Describe the dividend theories-dividend irrelevanceDescribe the dividend theories: dividend irrelevance, dividend preference, tax effect theory, clientele effect, and signaling hypothesis. |

## What is the equipments after-tax salvage valueKasper Film Co. is selling off some old equipment it no longer needs because its associated project has come to an end. The equipment originally cost $22,500, of which 80% has been depreciated. The firm can sell the used equipment today for $7,500, a.. |

## Zero coupon bonds on the marketAtlantis Fisheries issues zero coupon bonds on the market at a price of $489 per bond. These are callable in 6 years at a call price of $580. Using semi annual compounding, what is the yield to call for these bonds? |

## Compute the year nine future value if depositsGiven an 10 percent interest rate, compute the year 9 future value if deposits of $2,700 and $3,700 are made in years 1 and 3, respectively, and a withdrawal of $1,125 is made in year 4. |

## Calculating portfolio betasYou own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.29 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio? |

## What is the monthly payment on mortgagePlease provide the steps to solving this problem using a financial calculator as well as reasonings for certain steps if needed: What is the monthly payment on a $770,000 mortgage? Assume a standard 30-year, 5.5% mortgage with monthly payments. |

## Based on the security market lineBased on the security market line, company C-A stock has a required return of 7% and company C-B has a required return of 5%. C-A has a standard deviation of returns of 9%. |

## Find the expected return on the stock using the capm modelCAPM is one of the more popular models for determining the risk premium on a stock. If the Expected Return on the Market Portfolio is 9.10%, the Risk-Free Rate is 2.0%, and the Beta for Stock i is 0.9. Find the Expected Return on the Stock using the .. |

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