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What is the sensitivity of the NPV to the price? and quantity? Two parts. Price and quantity.
McGilla Golf is evaluating a new golf club. The clubs will sell for $875 per set and have a variable cost of $430 per set. The company has spent $150,000 for a marketing study that determined the company will sell 60,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 12,000 sets of its high-priced clubs. The high-priced clubs sell at $1,100 and have variable costs of $620. The company will also increase sales of its cheap clubs by 15,000 sets. The cheap clubs sell for $400 and have variable costs of $210 per set. The fixed costs each year will be $9,300,000. The company has also spent $1,000,000 on research and development for the new clubs. The plant and equipment required will cost $29,400,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $1,400,000 that will be returned at the end of the project. The tax rate is 40 percent, and the cost of capital is 14 percent. What is the sensitivity of the NPV to the price and quantity? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
your organization has a canteen tulip refractory serving hot meals snacks and refreshments during the working day. at
A company has a wacc equal to 15.00%, a constant and perpetual expected EBITDA equal to 3,100,000 Euro, an unlevered return on equity of 22.53% and it keeps a constant debt-to-equity ratio. If the tax rate is equal to 25% and the assets are fully dep..
Onnie Banko Swimwear recently issued $75.00 par-value preferred stock that pays a 7.00% dividend rate per year. The stock has a beta of 1.09, and the current risk-free rate is 2.40% and the market return (RM) is 11.80%. Assuming that CAPM holds, what..
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What is the present value of $7,800 received 13 years from now using a 16% interest or discount rate, with interest compounded annually?
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You borrowed $20,000 today from your uncle to finance your college education. Your uncle is very flexible in your repayment plan, but he will charge an 8% interest compounded annually for any unpaid balance. Suppose your payment plan is as follows
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What is the value of firm L according to MM's proposition 1 with corporate taxes and micky is the holder of $30,000 worth of L's stock. What rate of return can he expect, assuming a dividend payout of 100%.
Calculate Touring Enterprises' weighted average cost of capital (WACC). Work as follows: first, compute the after-tax cost of debt, then compute the cost of equity. Cite both formulas, and show all your work.
justify and criticize the usual assumption made in financial management literature that the objective of a company is
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