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Gemini, Inc., an all-equity firm, is considering a $1.7 million investment that will be depreciated according to the straight-line method over its four-year life. The project is expected to generate earnings before taxes and depreciation of $595,000 per year for four years. The investment will not change the risk level of the firm. The company can obtain a four-year, 9.5 percent loan to finance the project from a local bank. All principal will be repaid in one balloon payment at the end of the fourth year. The bank will charge the firm $45,000 in flotation fees, which will be amortized over the four-year life of the loan. If the company financed the project entirely with equity, the firm's cost of capital would be 13 percent. The corporate tax rate is 30 percent. Using the adjusted present value method, calculate the APV of the project. (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Bill plans to have $1,200,000 for his retirement in 40 years. How much should he save annually if he thinks he can earn an average of 6% a year on his investments?
you are the cfo of a u.s. firm whose wholly owned subsidiary in mexico manufactures component parts for your u.s.
The following products are taken from the financial statements of Tracy Corporation for 2010:
If an investor bought 2 XYZ Feb 60 call at 2 and Sells 2 XYZ Feb 70 calls at 1. What's the gain or loss on the contracts at a market of 75? What type of strategy is the investor using?
callaghan motors bonds have 10 years remaining to maturity.interest is paid annually they have a 1000 per value the
You lease a sofa for 4 years. APR is 11%. Annual payments starting up front at $180 (basically, $15 per month). There is a buyout option at the end of the lease for $600. What would the sofa cost to buy based on the foregoing?
please use approximation method to find the expected rate of return on a 1 year treasury bill.if the real risk- free
Which stock has the most systematic risk? Which one has the most unsystematic risk? Which stock is "riskier"? Explain.
Heidi owns 400 shares of Boyd Enterprises stock, which is valued at $17 a share. Boyd Enterprises just declared a 10 percent stock dividend. How many shares will Heidi own and what will the price per share be after the dividend?
You have four stocks that have each decreased $2500 in value. If you sell two of them and take the full allowable deduction this year, how much can you carry over to next year?
Mary sells the share to Tom on October 20th, Tom sells the share to William on October 30th. Who will receive the dividend?
Your firm is a U.S.-based exporter of toys. You have sold an order to an Italian firm for €1,000,000 worth of toys. Payment from the Italian firm (in €) is due in 1 year.
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