acme bank is making a commercial real estate loan to jackson apartments with the following data purchase price 20 million, loan to value ratio of 75%, minimum debt service coverage 1.1 times, interest rate of 5%, cap rate of 7% and 30 year amortization. which of the following statements are false? a) cash on cash return in year one is 6.67% b) loan yield is 9.33% c) debt coverage ratio is 1.45 times

Suppose a company has proposed a new 4-year project. The project has an initial outlay of $70,000 and has expected cash flows of $20,000 in year 1, $23,000 in year 2, $29,000 in year 3, and $35,000 in year 4. The required rate of return is 12% for projects at this company. What is the discounted payback for this project? (Answer to the nearest tenth of a year, e.g. 3.2)

1. Venture capitalists often will describe long-term financing stages of a company using an “alphabet soup” of terminology. For example, Series A financing, etc.

What are the four stages of investment in this alphabet soup, and what do they represent?

Given that business is about maximizing stakeholder wealth and given that there are laws governing the process by which this is accomplished, is there even room for ethics in business? In other words, if organizations (and organizational members) follow the law, is there any additional need for ethical considerations? When organizations maximize stakeholder wealth, aren't they already doing the "right" thing according to the design and purpose of organizational existence?

Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt; its beta is 1.20 (given its target capital structure). Vandell has $8.00 million in debt that trades at par and pays a 7% interest rate. Vandell’s free cash flow (FCF₀) is $1 million per year and is expected to grow at a constant rate of 5% a year. Vandell pays a 30% combined federal and state tax rate. The risk-free rate of interest is 4%, and the market risk premium is 6%. Hasting’s first step is to estimate the current intrinsic value of Vandell.

1. What are Vandell’s cost of equity and weighted average cost of capital? Do not round intermediate calculations. Round your answers to two decimal places.

   Cost of equity:   %

   WACC:   %

2. What is Vandell’s intrinsic value of operations? (Hint: Use the free cash flow corporate valuation model.) Do not round intermediate calculations. Enter your answer in millions. For example, an answer of $1.23 million should be entered as 1.23, not 1,230,000. Round your answer to two decimal places.

   $   million

3. What is the current intrinsic value of Vandell’s stock? Do not round intermediate calculations. Round your answer to the nearest cent.

   $   / share

Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt; its beta is 1.45 (given its target capital structure). Vandell has $9.42 million in debt that trades at par and pays a 7.1% interest rate. Vandell’s free cash flow (FCF₀) is $2 million per year and is expected to grow at a constant rate of 5% a year. Both Vandell and Hastings pay a 35% combined federal and state tax rate. The risk-free rate of interest is 4% and the market risk premium is 7%.

Hastings Corporation estimates that if it acquires Vandell Corporation, synergies will cause Vandell’s free cash flows to be $2.6 million, $2.8 million, $3.4 million, and $3.94 million at Years 1 through 4, respectively, after which the free cash flows will grow at a constant 5% rate. Hastings plans to assume Vandell’s $9.42 million in debt (which has a 7.1% interest rate) and raise additional debt financing at the time of the acquisition. Hastings estimates that interest payments will be $1.6 million each year for Years 1, 2, and 3. After Year 3, a target capital structure of 30% debt will be maintained. Interest at Year 4 will be $1.430 million, after which the interest and the tax shield will grow at 5%.

Indicate the range of possible prices that Hastings could bid for each share of Vandell common stock in an acquisition. Do not round intermediate calculations. Round your answers to the nearest cent.

The bid for each share should range between $   per share and $   per share.

Bird's Eye Treehouses, Inc., a Kentucky company, has determined that a majority of its customers are located in the Pennsylvania area. Therefore, it is considering using a lockbox system offered by a bank located in Pittsburgh. The bank has estimated that use of the system will reduce collection time by 1.5 days. Average number of payments per day 700 Average value of payment $ 650 Variable lockbox fee (per transaction) $ .10 Annual interest rate on money market securities 4.1 % a. What is the NPV of the new lockbox system? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Suppose in addition to the variable charge that there is an annual fixed charge of $3,000 to be paid at the end of each year. What is the NPV now?

Can you please show me how to do this on excel with formulas. I am having a difficult time understanding how to incorporate the depreciation into the problem! Thank you

You are evaluating two different milling machines to replace your current aging machine. Machine A costs $248868, has a three-year life, and has pretax operating costs of $58935 per year. Machine B costs $406397, has a five-year life, and has pretax operating costs of $33004 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $40886. Your tax rate is 34 % and your discount rate is 10 %.

What is the EAC for Machine A?

Your firm wishes to raise $50,000,000 by issuing regular coupon bonds. These will have a 10% coupon rate, a 6% YTM, pay annually, and mature in 12 years. What is your firm's total repayment in year 12?

How are the Government National Mortgage Association and the Federal National Mortgage Association similar and different?