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Finance question, for cash flow estimation Chapter 7 Problems: A firm is considering a new project. The project is expected to generate sales of 15,0CC units per year. Units will sell at $14 each. Variable costs are expected to be $8 each for the first year, $7 each thereafter. Fixed costs will be $5,000 per […]
TASK The Allied Group is considering two investments. The first investment involves a packaging machine, which can be used to package garments for shipping orders to customers. The second possible investment would be a molding machine that would be used to mold the mannequin parts. The first possible investment is the packaging machine, which will […]
1. Answer the questions based on the table below. Cash Dividend Stock Repurchases Stock Dividend Value of Operations $900,000,000 $900,000,000 $900,000,000 Value of Cash balance 80,000,000 80,000,000 80,000,000 Total value of firm $980,000,000 $980,000,000 $980,000,000 − Debt 100,000,000 100,000,000 100,000,000 − Preferred stock 80,000,000 80,000,000 80,000,000 Value of equity $800,000,000 $800,000,000 $800,000,000 # of shares […]
A project has a present value (PV) of $100 million today and a 50% probability to be worth either $130 million or $90 million next year. Assume that the WACC is 10%, the simple annual risk-free rate is 4%, and the project costs $103 million today. 1. Should you do the project based on the […]
Finance Read the word document first. The word document includes all the information for the question. You can see this is a company’s four years project. You need to compute the NPV for this project at the end. In the Excel document, “Input Area” summarizes the information for the word document. Use that information to […]
Finance Using the information below, forecast the costs associated with each alternative and perform a sensitivity analysis. For the sensitivity analysis, focus on the construction overrun cost and change the discount rate to 5%. Perform a separate sensitivity analysis for each component. Make sure to present the NPV for each relevant alternative and under each […]
XYZ, Inc. has a beta of 0.8. The yield on a 3-month T-bill is 5%, and the yield on a 10-year T-bond is 7%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 20%. What is the estimated cost of common equity using the CAPM? […]
Complete problem: Cost of Equity-CAPM XYZ, Inc. has a beta of 0.8. The yield on a 3-month T-bill is 5%, and the yield on a 10-year T-bond is 7%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 20%. What is the estimated cost of […]
You will type your answers into this document. Save the document with your last name and submit to the dropbox. Note that you will get partial credit if you show your work even if the answers are incorrect. The table below gives the initial investment (the negative numbers at “Year 0”) for two projects. Compute […]
Resources: Corporate Finance Create a 350-word memo to management including the following: Describe the use of internal rate of return (IRR), net present value (NPV), and the payback method in evaluating project cash flows. Describe the advantages and disadvantages of each method. Calculate the following time value of money problems: If you want to accumulate […]
