FINANCE-ABC Inc. is considering an investment of $1,750 million

QUESTION

QUESTION 3

ABC Inc. is considering an investment of $1,750 million with
after-tax cash inflows of $332 million per year for six years and an additional
after-tax salvage value of 87 million in Year 6. The required rate of return is
8%. What is the investment’s Profitability Index (PI)?

Enter your answer rounded off to two decimal points.

QUESTION 4

What is the project’s initial investment outlay based on the
following information: The machinery could be purchased for $29,501. Shipping
and installation costs would cost another $9,450. The project would require an
initial investment in net working capital of $5,158. The company’s tax rate is
30%.

Enter your answer rounded off to two decimal points. Do not
enter $ or comma in the answer box. For example, if your answer is $12.345 then
enter as 12.35 in the answer box.

QUESTION 5

Suppose the nominal rate is 12.6% and the inflation rate is
3.91%. Solve for the real rate. Use the Fisher Effect formula.

Note: Enter your answer in percentages rounded off to two
decimal points. Do not enter % in the answer box. For example, if your answer
is 0.12345 then enter as 12.35 in the answer box.

QUESTION 6

ABC Company purchased a new machinery 4 years ago for
$55,786. Today, it is selling this equipment for $11,952. What is the after-tax
salvage value if the tax rate is 31 percent?

The MACRS allowance percentages are as follows, commencing
with year one: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent.

Enter your answer rounded off to two decimal points. Do not
enter $ or comma in the answer box. For example, if your answer is $12.345 then
enter as 12.35 in the answer box.

QUESTION 12
Based on the following
information, what is the portfolio beta?

Stock

Value

Beta

A

$46,643

0.56

B

$30,604

3.41

C

$23,859

3.2

D

$3,730

2.31

Enter your answer rounded off
to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box.

QUESTION 13
What is the NPV of this project
if the required rate is 6%?
Year CF
0 -$1,893
1
$871
2
$1,646
3
$960
Enter your answer rounded off
to two decimal points. Do not enter $ or comma in the answer box. For example,
if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 14

A 12-year project is expected to generate annual sales of
$270,081, variable costs of $32,642, and fixed costs of $39,056. The annual
depreciation is $12,153 and the tax rate is 33 percent. What is the annual
operating cash flow?

Enter your answer rounded off to two decimal points. Do not
enter $ or comma in the answer box. For example, if your answer is $12.345 then
enter as 12.35 in the answer box.

QUESTION 15
What is the Profitability Index (PI) of this project if the
required rate is 12%?
Year CF
0 -$2,273
1
$697
2
$511
3
$1,494
4
$467
5
$919
Enter your answer rounded off
to two decimal points. For example, if your answer is 12.345 then enter as
12.35 in the answer box

QUESTION 16

ABC Company is considering an investment that will cost the
company $644 at time=0. The after-tax cash flows are expected to be $114 each
year for 10 years. What is the payback period?

Enter your answer rounded off to two decimal points.

ANSWER:

REQUEST HELP FROM A TUTOR