What is the projected net present value of this project

Assignment Help Financial Management
Reference no: EM13923690

O.K., Inc. uses one-third debt and two-thirds common stock to finance their operations. The after-tax cost of debt is 4.5 percent and the cost of equity is 9 percent. The management of O.K., Inc. is considering a small project that they consider to be equally as risky as the overall firm. The project has an initial cash outlay of $10,000. The project is expected to have a single cash inflow of $17,500 at the end of two years. What is the projected net present value of this project?

$5,040.41, $5,143.32, $5,707.07, $6,025.27, $6,279.07

Reference no: EM13923690

Questions Cloud

What are some of the benefits of modularity : What are some of the benefits of modularity? What is functional abstraction? What is information hiding
Coordinating internal integration of all other body systems : The nervous system interacts with the ___________ system to coordinate the internal integration of all the other body systems together.
Require the acquisition of new knitting and tying machine : Dd a new line of bow ties that will require the acquisition of new knitting and tying machine. The machine will cost $1,000,000. It is classified as a 7-year MACRS asset and will be depreciated as such. Interest costs associated with financing the eq..
How can derivatives be used in conjunction with stock : How can derivatives be used in conjunction with stock and Treasury bills to replicate the payoffs to other securities and create arbitrage opportunities for an investor?
What is the projected net present value of this project : O.K., Inc. uses one-third debt and two-thirds common stock to finance their operations. The after-tax cost of debt is 4.5 percent and the cost of equity is 9 percent. The management of O.K., Inc. is considering a small project that they consider to b..
Suprachiasmatic nuclei control wakefulness-body temperature : How could we show that the suprachiasmatic nuclei control wakefulness and body temperature with a periodicity of 25 hours independent of the daily cycling of light
How design flexibility might influence investors preference : How differences in contract liquidity and design flexibility might influence an investor's preference in choosing one instrument over the other.
What is a linear implementation : What is a linear implementation? What kind of implementation of the ADT table is appropriate for retrieval-dominated applications, if the maximum size of the table is known? Why
What is the order m of the maximum : Light of 650 nm is incident on two slits. A maximum is seen at an angle of 4.10 degrees and a minimum of 4.78 degrees. What is the order m of the maximum and what is the distance d between the slits?

Reviews

Write a Review

Financial Management Questions & Answers

  How much interest do you pay over the life of the loan

You are thinking about buying a home for $120,000 and can put down $20,000. If the lender charges a fixed rate of 6.5% and you want a 30 year mortgage, what is the monthly payment on the $100,000 loan? How much interest do you pay over the life of th..

  The method used to calculate operating cash flow

The method used to calculate Operating Cash Flow [OCF] as shown in the videos is the ________.

  Paper analysis in a balance sheet and financial statements

I need someone to do 8 pages paper analysis in a balance sheet and financial statements of a company

  What is her nominal annual yield on this investment

A woman purchases a 10-year par bond with 8% semi-annual coupons. The bond is priced to yield 7.5% converted semi-annually. The coupons are reinvested in a fund paying 7.0% nominal, converted semi-annually. What is her nominal annual yield on this in..

  Are all radio shack stores included in the bankruptcy

In February 2015, Radio Shack filed for bankruptcy protection under Chapter 11 of the Bankruptcy Act. Why did the company file under Chapter 11 instead of Chapter 7? Are all Radio Shack stores included in the bankruptcy? How does the company plan to ..

  Determine the expected value of return

Determine the expected value of return,  Evaluate the value of the bond if the required return is (1) 12%, (2) 14%, and (3) 10%, with 10 years to maturity.

  Changes working capital policies to improve cash flow cycle

Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $120,000 (all on credit), and it earned a net profit of 7%. What would Strickler's ROA have been if the inven..

  The beta associated with a risk free asset

The beta associated with a risk free asset ___.

  What will be the amount of capital tax on each investment

Samuel Jenkins made two investments, the first was 13 months ago and the second was two months ago. He just sold both investments and has a capital gain of $7,000 on each. If Samuel is in the 28 percent tax bracket, what will be the amount of capital..

  What was the capital gains yield and dividend yield

Suppose a stock had an initial price of $96 per share, paid a dividend of $2.70 per share during the year, and had an ending share price of $77.50. Compute the percentage total return. What was the dividend yield? What was the capital gains yield?

  Correlation coefficient between annual portfolio returns

Greta, an elderly investor, has a degree of risk aversion of A = 5 when applied to return on wealth over a 3-year horizon. She is pondering two portfolios, the S&P 500 and a hedge fund, as well as a number of 3-year strategies. If the correlation coe..

  Select a company for analysis this company should be quoted

select a company for analysis. this company should be quoted on one of the principal international exchanges.prepare a

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