You have been offered a unique investment opportunity. If you invest $11,700

​today, you will receive $585 one year from​ now, $1,755 two years from​ now, and $11,700 ten years from now

.a. What is the NPV of the opportunity if the cost of capital is 6.5% per​ year? Should you take the​ opportunity?b. What is the NPV of the opportunity if the cost of capital is 2.5% per​ year? Should you take it​ now?

a. What is the NPV of the opportunity if the cost of capital is 6.5% per​ year?

If the cost of capital is 6.5% per​ year, the NPV is: $ (Round to the nearest​ cent.)

Should you take the​ opportunity?  ​(Select from the​ drop-down menu.)

You

▼

should not

should

take this opportunity.  

b. What is the NPV of the opportunity if the cost of capital is 2.5% per​ year? If the cost of capital is 2.5% per​ year, the NPV is: $ ​(Round to the nearest​ cent.)

Should you take it​ now?  ​(Select from the​ drop-down menu.)

You

▼

should not

should

take this opportunity at the new cost of capital.

Your factory has been offered a contract to produce a part for a new printer. The contract would last for 33 years and your cash flows from the contract would be $5.00

million per year. Your upfront setup costs to be ready to produce the part would be $8.00 million. Your discount rate for this contract is 8.0%.

a. What does the NPV rule say you should​ do?

b. If you take the​ contract, what will be the change in the value of your​ firm?

a. What does the NPV rule say you should​ do?

The NPV of the project is: million.  ​(Round to two decimal​ places.)

What should you​ do?  ​(Select the best choice​ below.)

A.The NPV rule says that you should accept the contract because the

NPV less than 0NPV<0.

B.The NPV rule says that you should accept the contract because the

NPV greater than 0NPV>0.

C.The NPV rule says that you should not accept the contract because the

NPV greater than 0NPV>0.

D.The NPV rule says that you should not accept the contract because the

NPV less than 0NPV<0.

b. If you take the​ contract, what will be the change in the value of your​ firm?

If you take the​ contract, the value added to the firm will be: $ million. 

Find the present values of these ordinary annuities. Discounting occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent.

1. $700 per year for 16 years at 8%.

   $  

2. $350 per year for 8 years at 4%.

   $  

3. $200 per year for 8 years at 0%.

   $  

4. Rework previous parts assuming they are annuities due.

   Present value of $700 per year for 16 years at 8%: $  

   Present value of $350 per year for 8 years at 4%: $  

   Present value of $200 per year for 8 years at 0%: $  

1. NuDayWear Inc. is a nationwide retail chain specializing in women's apparel. The company's most popular lines are West and SeaWear. West offers executive wear for women in the middle to high-end markets, and SeaWear features sportswear and stylish clothes, also targeted at women in the middle to high-end markets. The company has 95 million shares outstanding with a current market price of $10.55 per share. The company is expected to show net income of $41 million in the next 12 months. Forecast sales and EBITDA are $635 million and $63 million, respectively. Debt outstanding is $120 million. (Show all your work for credit).

a. Do you think that the list below represents valid comparable companies? If not, which are comparable and why?

b. What is the current total equity value of NuDayWear? Total enterprise market value of NuDayWear?

c. Suppose you are asked to value NuSoftWear Inc. given the following information. Using your comparable companies from a. above what is your estimate of equity? Of enterprise value?

N.B.: This is all available information on the problem. The list of companies mentioned in a is the list below with given data.

You have just turned twenty-six years of age and feel it is necessary to upgrade your qualifications. After some consideration, you feel that undertaking full-time study for an MPA degree at the Fletcher School is one alternative. For the two years of full-time study, tuition and living expenses will be $55,000 per year. In addition, you will have to give up your current job with a salary of $75,000 per year. Assume all cash flows occur at the end of the year. Assume a real interest rate of 3% per year, ignoring taxes. Also assume that the salary increase is a fixed real amount that starts after you complete your degree (at the end of the year following graduation) and lasts until retirement at age sixty-five. In order to justify the investment, by how much does your salary have to increase as a result of getting the MPA degree?

The Gulf Power Company currently is an all-equity firm. The value of Gulf Power's equity is $12,000,000 and there are 600,000 shares outstanding. The expected annual EBIT of Gulf Power is $2,400,000. Those earnings are also expected to remain constant into the foreseeable future. Gulf Power is in the 40-percent tax bracket. The Gulf Power Company plans to announce that it will issue $3,000,000 of perpetual bonds and uses the proceeds to repurchase common stock. The bonds will have a 5-percent coupon rate. After the sale of the bonds, Gulf Power will maintain the new capital structure indefinitely. The MM theory applies.

1.What is the firm's cost of capital before the capital restructuring?

2. After the sale of the bonds, Gulf Power will maintain the new capital structure indefinitely. The MM theory applies. What is the number of shares repurchased?

3.After the sale of the bonds, Gulf Power will maintain the new capital structure indefinitely. The MM theory applies. What is the firm's cost of capital after the capital restructuring?

4.After the sale of the bonds, Gulf Power will maintain the new capital structure indefinitely. The MM theory applies. What is Gulf Power's cost of equity after the capital restructuring?

5.After the sale of the bonds, Gulf Power will maintain the new capital structure indefinitely. The MM theory applies. What is the firm's net income (NI) after the capital restructuring?

Managers at Acme Doohickey Co. are considering two projects.

• Project A: purchase and operation of a new machine, called the Starpunch, for manufacturing Acme doohickeys. The life of this project is three years.
• Project B: purchase and operation of a new machine, called the Sunspot, for manufacturing Acme doohickeys. The life of this project is two years.

The machines have identical capacity and produce the same doohickey. The company only has floor space in its machinists’ shop for one machine.

Assume that the appropriate discount rate in 8%, compounded annually. Identify which project, if either, managers should accept, and explain why.

Table: Expected Cash Flows for Projects A and B

Note: the table lists net revenue and net cost for each project and each year. But the table is incomplete; you will need to calculate the Net Cash Flows.

Group of answer choices

Reject both projects. When both of the project lifetimes are correctly extended to 6 years, the NPV for each project is negative.

A) Accept Project A. Its NPV > 0. Also, when both of the project lifetimes are correctly extended to 6 years, the Project A NPV = $9,373 which is greater than the Project B NPV = $t,662.

B) Accept Project A. Its NPV > 0. Also, when both of the project lifetimes are correctly extended to 6 years, the Project A NPV = $6,559 which is greater than the Project B NPV = $3,218.

C) Accept Project B. Its NPV > 0. In addition, its cost in each year is less than the corresponding cost for Project A.

D) Accept Project A. Its NPV > 0. Also, when both of the project lifetimes are correctly extended to 6 years, the Project A NPV = $3,656 which is greater than the Project B NPV = $1,241.

Chilly Moose Fruit Producer has a total asset turnover ratio of 6.00x, net annual sales of $25 million, and operating expenses of $11 million (including depreciation and amortization). On its balance sheet and income statement, respectively, it reported total debt of $2.50 million on which it pays a 7% interest rate.

To analyze a company’s financial leverage situation, you need to measure the firm’s debt management ratios. Based on the preceding information, what are the values for Chilly Moose Fruit’s debt management ratios?

Influenced by a firm’s ability to make interest payments and pay back its debt, if all else is equal, creditors would prefer to give loans to companies with     times-interest-earned ratios (TIE).

You are buying a house and the mortgage company offers to let you pay a​ "point" 1.0% of the total amount of the​ loan) to reduce your APR from 5.88% to 5.63% on your $419,000​, 30​-year mortgage with monthly payments. If you plan to be in the house for at least five​ years, should you do​ it? ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)

The monthly mortgage payment at 5.88% APR is $_ ?

15) What does being a manager offer to an employee? 15)

1. many rewards apart from money and status
2. few rewards due to the large amount of stress
3. not having to stretch his or her abilities
4. being exempt from some current laws
5. little apart from money and status

increasing its market share over the next few years. The management then set up a 12- month plan that defines how the organization will conduct its business based on the action plan, including clear sales targets for each week. The second plan is an example of a(n) ________ plan.

1. strategic
2. typical
3. dependent
4. facilities
5. operating

Geometric Gradient Problem:

The Saudis produce 3.65 Billion barrels of oil a year. Let’s ignore climate change and drone stuff and say that production will increase at 2% per year due to demand from Asia. Also, the current price of $65/barrel is expected to increase by 4 percent a year for 20 years. What is the present worth of the anticipated 20 years revenue stream assuming the interest rate is 8%.

3. 3) Thomson Co. had $150,000 and $310,000 in cash on the balance sheet at the end of 2XX0 and 2XX1, respectively. Its cash flow from operating activities totaled $2.5mi and its cash flow from long-term investment activities totaled $2mi. The firm issued $500,000 in L-T debt and paid $50,000 dividends. How much common stock did the firm repurchase?

4. 4) During 2XX1, Western Corp issued $3mi in common stocks and purchased $5mi fixed assets. Its cash flow from operating activities totaled $6mi. Its notes payable decreased by $1mi. The firm had $500,000 cash on its balance sheet at the end of 2XX0. Calculate the amount of cash at the end of 2XX1.

Best Foods Corp. expects earnings and dividends to grow at a rate of 25% for the next 4 years. After that period, the growth rate in earnings and dividends will fall to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?

After making 19 payments on a 60-month, $10000 car loan with APR of 4%, what is the outstanding balance on the loan? Round to the penny.

4.13

Complete the balance sheet and sales information using the following financial data:

Total assets turnover: 1.2×
Days sales outstanding: 73.0 days^a
Inventory turnover ratio: 5×
Fixed assets turnover: 2.5×
Current ratio: 2.0×
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 25%
^aCalculation is based on a 365-day year.

Do not round intermediate calculations. Round your answers to the nearest dollar.