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Which of the following will increase the present value of the cash flows associated with the increase and release of the $80,000 of working capital?
Ryngaert Inc. recently issued noncallable bonds that mature in 15 years. They have a par value of $1,000 and an annual coupon of 5.7%. If the current market interest rate is 9.7%, at what price shou
The internal rate of return of 14%. What was the annual cash inflow that was used in the calculation of the present value?
Suppose a stock had an initial price of $91 per share, paid a dividend of $2.40 per share during the year, and had an ending share price of $102. Compute the percentage total return.
Ataxia"s internal rate of return on this equipment is 14%. Ataxia"s discount rate is also 14%. What is the payback period on this equipment?
Fed Ex common stock currently trades at $51.00 and its most recent annual dividend was $1.40. Sunday night, FedEx issued a press release indicating that future years' dividends will continue to grow
Assuming the company"s discount rate is 10%, what is the purchase price of the machine if the net present value of the investment is $17,000?
The machine is expected to generate net cash inflows of $60,000 per year in each of the 10 years. Fossa"s discount rate is 18%. What is the net present value of this machine?
A proposed new investment has projected sales of $325,000. Variable costs are 50 percent of sales, and fixed costs are $79,000; depreciation is $37,500. Prepare a pro forma income statement assuming
Roy's Welding Supplies common stock sells for $20 a share and pays an annual dividend that increases by 6 percent annually. The market rate of return on this stock is 8 percent. What is the amount o
If Anthony"s required rate of return is 10%, then the most he would be willing to pay for the new computer system would be?
The Allen Company is planning an investment with the following characteristics? The initial cost of the equipment is?
Kendall Inc has 15 million of outstanding bonds with a coupon rate of 10 percent. The yield to maturity on these bonds is 12.5 percent. If the firms tax rate is 30 percent, what is relevant cost of
An investment project has the following characteristics:The life of the equipment would be: It is impossible to determine from the data given.
The equipment originally cost $20 million, of which 80% has been depreciated. Carter can sell the used equipment today to another airline for $5 million, and its tax rate is 40%. What is the equipme
The Corner Bakery has a bond issue outstanding that matures in 7 years. The bonds pay interest semi-annually. Currently, the bonds are quoted at 101.4 percent of face value and carry a 10 percent co
The Shoe Outlet has paid annual dividends of $0.65, $0.72, $0.73, and $0.75 per share over the last four years, respectively. The stock is currently selling for $26 a share. What is this firm's cost
Daniel and Alice want to purchase a house. Suppose they invest 600 dollars per month into a mutual fund. How much will they have for a downpayment after 7 years if the per annum rate of return of th
How large would the annual net cash inflows from the intangible benefits have to be to make this a financially acceptable investment?
Amax, Inc. has a beta of 1.4. The yield on 10-year Treasury Bonds is 2% and the market risk premium is 5%. What is the cost of capital for common equity using the CAPM?
Waterford Corp. issued a 30 year, 8 % semi-annual bond 7 years ago. The bond currently sells for 95% of its face value. The company's tax rate is 34%. What is the pretax cost of debt? What is the a
What is the average defection rate for grocery store shoppers in a local area of a large city if they spend $50 per visit, shop 52 weeks per year, the grocery store has a 16 percent gross margin
An increase in the domestic interest rate causes the demand for domestic assets to ________ and the domestic currency to ________, everything else held constant.
The theory of asset demand suggests that the most important factor affecting the demand for domestic and foreign assets is?
Define Weighted Average Cost of Capital and explain why a company must earn at least its Weighted Average Cost of Capital on new investments. What are the financial implications if it does not?