Principles of Corporate Finance (12th Edition) Chapter 5, Problem 11P Calculate the NPV of each project for discount rates of 0%, 10%, and 20%. Plot these on a graph with NPV on the vertical axis and discount rate on the horizontal axis. I tried to input the values in the given formula and I am getting completely different answers can you please input the formula and see where I went wrong?

Alex has ksh12 million to invest for three months. The current spot rate of the Tsh is ksh0.062. The three months forward rate of the Tsh is Ksh0.064. The interest rate in Kenya is 18%per annum while in Tanzania is 28%per annum. Required Calculate the gain fromcovered interest arbitrage. .

How does the time value of money impact investment decisions?

Time value of money impacts investment decisions due to the fact that dollars on hand presently are worth more than payment expected in the future. This is due to inflation in the American economy. On hand dollars can be utilized to invest and earn capital gains.

2. The future value of an investment depends on what key factors?

The future value of an investment depends on the depreciation rate and economical factors.

3. How are stocks and bonds similar, and how are they different?

Stocks are shares of a company in which they gain monetarily. Bonds are debts. They are similar because they are both known as securities.

A firm is considering whether to lease or buy a machine that costs $100,000. The machine would be kept for three years. The firm’s cost of debt is 10% and its tax rate is 40%. If the machine is owned then the company would have to pay $10,000 per year in maintenance cost (payable at the end of the year). If the machine is leased then the maintenance will be taken care of by the lessor. If leased, the lease payments would be $35,000 at time zero and at the end of each of the next three years. Assume straight-line to a salvage value of $0 three years from now.

What is the net advantage to leasing if any?

Whitman Antique Cars Inc. has the following data, and it follows the residual dividend model. Some Whitman family members would like more dividends, and they also think that the firm's capital budget includes too many projects whose NPVs are close to zero. If Whitman reduced its capital budget to the indicated level, by how much could dividends be increased, holding other things constant?

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You are trying to evaluate an exotic two-year European option on TSLA. TSLA shares are currently trading at $200. Next year, TSLA shares will either increase by either 10% or decrease by 5%. In the following year, TSLA will either increase by 5% or decrease by 10% from the stock price at year 1. The risk-free rate is 5% per year. However, this isn’t a normal call option or put option. Instead, the option rewards you if the stock price doesn’t move very much in either direction. Specifically, if you exercise the option you will get: $25 – (|stock price - $210|) (as a refresher, the “|” symbol means the absolute value). What is the value of the option if it expires in 2 years, and is a European style option?

The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its before-tax cost of debt is 8%, and its marginal tax rate is 25%. Assume that the firm's long-term debt sells at par value. The firm’s total debt, which is the sum of the company’s short-term debt and long-term debt, equals $1,133. The firm has 576 shares of common stock outstanding that sell for $4.00 per share.

Assets Liabilities And Equity

Cash $ 120 Accounts payable and accruals $ 10

Accounts receivable 240    Short-term debt 53

Inventories 360    Long-term debt 1,080

Plant and equipment, net 2,160    Common equity 1,737

Total assets $2,880 Total liabilities and equity $2,880

Calculate Paulson's WACC using market-value weights. Do not round intermediate calculations. Round your answer to two decimal places.

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You are trying to value an option on DMH (Ducati). The stock price is currently $70. Next year the stock price will either increase or decrease by $10. The following year the stock price will either increase or decrease (from the year 1 value) by $5. One-year U.S. treasuries currently have an annual return of 4%. Assume that at a one-year U.S. treasury bought in year 1 (maturing in year 2) will have a one-year return of 5%. a. What is the value on a two-year European put option with a strike price of $78? b. What is the value of a two-year American put option with a strike price of $78 (assume you can only exercise at year 1 or year 2, not today)?

Project L costs $35,000, its expected cash inflows are $15,000 per year for 10 years, and its WACC is 14%. What is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.

A project has annual cash flows of $5,500 for the next 10 years and then $7,000 each year for the following 10 years. The IRR of this 20-year project is 11.44%. If the firm's WACC is 9%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.

Explain in details please

Consider a sample of year-end prices for Alphabet, Inc. (Google) over a five year period. Google did not pay a dividend over the sample period.

Calculate the average (arithmetic) return.

Calculate the holding period return.

Calculate the geometric return.

Calculate the standard deviation in the returns.

Besides discounted cash flow valuation methods, is there any alternative valuation approach?What kind of the information or assumptions we need to have to apply the approach? (200 words)

Could you please explain this step by step? I do not understand how to calculate long end duration with the different prices?

What is long end duration? Calculate the long end duration for a bond with a current price of £109.5, if its price drops to £108.5 when the yield curve steepens at the long end by 50bps; and if its price increases to £112.2 when the yield curve flattens at the long end by 50bps. Interpret the value of the long-end duration obtained.