You purchased a house five years ago and borrowed $250,000 . The loan you used has 300 more monthly payments of $1,194 each, starting next month, to pay off the loan. You can take out a new loan for $226,119 at 3.00% APR compounded monthly , with 300 more payments, starting next month to pay off this new loan. and pay off the old loan. If your investments earn 3.00% APR compounded monthly , how much will you save in present value terms by using the new loan to pay-off the original loan? There may be rounding in this case , so pick the closest answer.$24,194 $25,668 $26,166 $26,951 $24,920
In: Finance
Q4. What is the y/y revenue trend? in apple company
In: Finance
Q5. What product revenue is growing fastest in % terms? Apple company
In: Finance
The total market value of the common stock of the Okefenokee Real Estate Company is $9.5 million, and the total value of its debt is $6.1 million. The treasurer estimates that the beta of the stock is currently 1.6 and that the expected risk premium on the market is 9%. The Treasury bill rate is 5%. Assume for simplicity that Okefenokee debt is risk-free and the company does not pay tax.
A. Required Return:_____%
B. Cost of Capital:____%
C. Discount Rate:_____%
D. Required Return:______%
In: Finance
New-Project Analysis
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $870,000, and it would cost another $25,000 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $699,000. The machine would require an increase in net working capital (inventory) of $16,500. The sprayer would not change revenues, but it is expected to save the firm $376,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 35%.
a. What is the Year 0 net cash
flow?
$
b. What are the net operating cash flows in Years 1, 2, and 3? Do not round intermediate calculations. Round your answers to the nearest dollar.
| Year 1 | $ |
| Year 2 | $ |
| Year 3 | $ |
c. What is the additional Year
3 cash flow (i.e, the after-tax salvage and the return of working
capital)? Do not round intermediate calculations. Round your answer
to the nearest dollar.
$
d. If the project's cost of
capital is 15 %, what is the NPV of the project? Do not round
intermediate calculations. Round your answer to the nearest
dollar.
$
Should the machine be purchased?
-Select-Yes OR No
In: Finance
|
Schultz Industries is considering the purchase of Arras Manufacturing. Arras is currently a supplier for Schultz, and the acquisition would allow Schultz to better control its material supply. The current cash flow from assets for Arras is $6.8 million. The cash flows are expected to grow at 5 percent for the next five years before leveling off to 2 percent for the indefinite future. The cost of capital for Schultz and Arras is 9 percent and 7 percent, respectively. Arras currently has 3 million shares of stock outstanding and $25 million in debt outstanding. |
|
What is the maximum price per share Schultz should pay for Arras? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| Price per share | $ |
In: Finance
Net Salvage Value
Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $25 million, of which 80% has been depreciated. The used equipment can be sold today for $7.5 million, and its tax rate is 30%. What is the equipment's after-tax net salvage value? Write out your answer completely. For example, 2 million should be entered as 2,000,000.
$
In: Finance
3. Consider the following semiannual bond: Coupon rate = 6.5% Maturity = 20 years Par value = $1,000 Market price = $1,035 Can be called in 8 years at $1,032.5 Can be called in 15 years at par Only put date in 8 years and putable at par value (1) What is the yield to maturity for this bond? (1 point) (2) What is the yield to first call? (1 point) (3) What is the yield to second call? (1 point) (4) What is the yield to worst for this bond? (2 points)
In: Finance
A company has just paid a dividend of $ 2 per share, D0=$ 2 . It is estimated that the company's dividend will grow at a rate of 18 % percent per year for the next 2 years, then the dividend will grow at a constant rate of 7 % thereafter. The company's stock has a beta equal to 1.4, the risk-free rate is 4.5 percent, and the market risk premium is 4 percent. What is your estimate of the stock's current price? Round your answer to two decimal places.
In: Finance
Columbus Manufacturing's stock currently sells for $ 24.32 a share. The stock just paid a dividend of $2 a share (i.e.,D0=2). The dividend is expected to grow at a constant rate of 3 % a year. What is the required rate of return on the company's stock? Express your answer in percentage, and round it to two decimal places, i.e., 13.54, for example for 0.1354)
In: Finance
Refer to Table 10-1, which is based on bonds paying 10 percent interest for 20 years. Assume interest rates in the market (yield to maturity) decrease from 25 to 20 percent. a. What is the bond price at 25 percent? b. What is the bond price at 20 percent? c. What would be your percentage return on the investment if you bought when rates were 25 percent and sold when rates were 20 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
In: Finance
The technique for calculating a bid price can be extended to many other types of problems. Answer the following questions using the same technique as setting a bid price; that is, set the project NPV to zero and solve for the variable in question. Guthrie Enterprises needs someone to supply it with 150,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost $1,900,000 to install the equipment necessary to start production; you’ll depreciate this cost straight-line to zero over the project’s life. You estimate that in five years this equipment can be salvaged for $160,000. Your fixed production costs will be $275,000 per year, and your variable production costs should be $10.40 per carton. You also need an initial investment in net working capital of $140,000. The tax rate is 25 percent and you require a return of 12 percent on your investment. Assume that the price per carton is $17.00. a. Calculate the project NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the minimum number of cartons per year that can be supplied and still break even? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. What is the highest fixed costs that could be incurred and still break even? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
In: Finance
| eBook
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Continue without saving |
In: Finance
The technique for calculating a bid price can be extended to many other types of problems. Answer the following questions using the same technique as setting a bid price; that is, set the project NPV to zero and solve for the variable in question. Guthrie Enterprises needs someone to supply it with 156,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost $1,960,000 to install the equipment necessary to start production; you’ll depreciate this cost straight-line to zero over the project’s life. You estimate that in five years this equipment can be salvaged for $166,000. Your fixed production costs will be $281,000 per year, and your variable production costs should be $11.00 per carton. You also need an initial investment in net working capital of $146,000. The tax rate is 21 percent and you require a return of 10 percent on your investment. Assume that the price per carton is $17.60. a. Calculate the project NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the minimum number of cartons per year that can be supplied and still break even? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. What is the highest fixed costs that could be incurred and still break even? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
In: Finance
Consider historical data showing that the average annual rate of return on the S&P 500 portfolio over the past 85 years has averaged roughly 8% more than the Treasury bill return and that the S&P 500 standard deviation has been about 27% per year. Assume these values are representative of investors' expectations for future performance and that the current T-bill rate is 6%.
Calculate the utility levels of each portfolio for an investor with A = 2. Assume the utility function is U = E(r) − 0.5 × Aσ2.
|
In: Finance