QUESTION Please help me figure out the answers for the missing portions. I have asked for help 3 other times and someone keeps putting the same figures and they are incorrect.A firm with a 13% WACC is evaluating two projects for this years capital budget. After-tax cash flows, including depreciation, are a Project A NPV […]
QUESTION Assume you have all your wealth (a million dollars) invested in the Vanguard 500 index fund andthat you expect to earn an annual return of 12%, with a standard deviation in returns of 25%. Youhave become more risk averse, and so you decide to shift $200,000 from the Vanguard 500 indexfund to Treasury bills. […]
QUESTION NPV profiles: scale differencesA company is considering two mutually exclusive expansion plans. Plan A requires a $39 million expenditure on a large-scale integrated plant that would provide expected cash flows of $6.23 million per year for 20 years. Plan B requires a $13 million expenditure to bui 1) Calculating NPV: NPV A = -39M […]
QUESTION Kings of Leon, Inc., has a book value of equity of $64,500. Long-term debt is $57,500. Net working capital, other than cash, is $22,300. Fixed assets are $92,100 and current liabilities are $7,300. How much cash does the company have and what is the amount of current assets? Solution: Kings of Leon Inc. Net […]
QUESTION scale differencesA company is considering two mutually exclusive expansion plans. Plan A requires a $39 million expenditure on a large-scale integrated plant that would provide expected cash flows of $6.23 million per year for 20 years. Plan B requires a $13 million expenditure to build a somewhat Answer : Plan A :expected cash flows […]
QUESTION 5. (TCO I) Below is a table showing the income of individuals A and B together with their food and clothing purchases in an untaxed environment (NOTE: K = 1000). Individual Income Food ClothingA $20,000 $5,000 $2,000B $50,000 $8,000 $8,000Before even considering any particular numbers, define precisely what is meant when we say that […]
QUESTION Suppose you hold a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolios beta is 0.65. Now, suppose you sell one of the stocks with a beta of 1.0 for $7,500 and use the proceeds to buy another stock whose beta is 1.35. Calculate your portf Solution: […]
QUESTION Assignment 3.3: Case Study, Casa de Diseo In January 2012, Teresa Leal was named treasurer of Casa de Diseo. She decided that she could best orient herself by systematically examining each area of the companys financial operations. She began by studying the firms short-term financial activities. Casa de Diseo is located in Southern California […]
QUESTION Robinson expects its 2012 sales and cost of goods sold to grow by20 percent over their 2011 levels.a. What will be the affect on its levels of receivables, inventories,and payments if the components of its cash conversioncycle remain at their 2011 levels? What will be its net investmentin working ca ANS : a. What […]
QUESTION 6. The Garcia Companys bonds have a face value of $1000 will mature in ten years and carry a coupon rate of 16%. Assume interest payments are made semi-annually.a. Determine the present value of the bonds cash flows if the required rate of return is 16.64 percent.b. how would your answer change Period Cash […]
