Suppose for a project X, it is estimated to have the following financials in Year 0 and Year 1. Suppose the project requires to buy a new piece of equipment which costs $9,000. It has a useful life of three years and a salvage value of $0 at the end of 3rd year. The changes in NWC (NOT the cash effect of change in NWC) at Year 0 and Year 1 are $5,000 and $2,000 respectively. The free cash flow (FCF) at Year 1 is $____
(HINT: pay attention to the signs).
| Year 0 | Year 1 | ||
| Unlevered net income | 0 | 20,000 | |
| Depreciation | 0 | 3,000 | |
| Change in Net Working Capital | 5,000 | 2,000 | |
| Captial Expenditure | 9,000 | 0 |
In: Finance
CRITICAL THINKING EXERCISES
A 75-year-old patient has a new prescription for corticosteroid therapy. Describe the assessment techniques appropriate to evaluate the patient and the use of the medication. What instructions should you provide regarding precautions to take related to corticosteroid therapy? How will your assessment and instructions differ if the patient is disoriented?
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You are offered an annuity that will pay you 10,000 at the end of each year for 20 years, with the first payment being in 10 years from today. If the interest rate is 12% annually, what is this annuity worth to you today?
Martha receives $1000 on the first of each year. Stewart receives $100 on the last day of each year. Both Martha and Stewart will receive payments for 11 years. At an 8% discount rate, what is the difference in the present value of these two sets of payments?
What is the present value of a perpetuity that will pay $10,000 in one year and grow at 3% annually, if the discount rate is 10%. (first payment at the end of this year).
Ben invested $5,000 twenty years ago in an account that has paid him 5% with semiannual compounding. How much does Ben have in his account today.?
You plan on investing $10,000 at the end of each year for the next 20 years. You found an investment that will pay you 8% annual percentage rate with daily compounding. How much will you end up in your investment account at the end of 20 years?
In: Finance
At the beginning of the year, you bought a $1,000 par value corporate bond with an annual coupon rate of 14 percent and a maturity date of 13 years. When you bought the bond, it had an expected yield to maturity of 8 percent. Today the bond sells for $1,710.
a. What did you pay for the bond?
b. If you sold the bond at the end of the year, what would be your one-period return on the investment? Assume that you did not receive any interest payment during the holding period.
In: Finance
A series of 10 end-of-year deposits is made that begins with $9,000 at the end of year 1 and decreases at the rate of $300 per year with 8% interest.
What amount could be withdrawn at t = 10? Type your answer here Round entry to the nearest dollar. Tolerance is ±4. Do it by hand and show your work please.
In: Finance
An investor purchased a stock for $42.98 and sold it one year later for $46.17. The investor also received a dividend payment of $0.13. What was the investor's realized capital gain rate? (Enter your answer as a decimal rounded to 4 decimal places, not a percentage. For example, enter .0153 instead of 1.53%.)
Hint:
Realized capital gain:
P1/P0-1
In: Finance
What is the price of a 3-year bond with a coupon rate of 6% and face value of $1,000? Assume the bond is trading at 6% yield, and that coupons are paid semi-annually. Assume semi-annual compounding.
In: Finance
A series of 10 end-of-year deposits is made that begins with $6,000 at the end of year 1 and decreases at the rate of $300 per year with 11% interest.
What amount could be withdrawn at t = 10? $
In: Finance
What is the FV at the end of year 3 of the following cash flow stream if the quoted interest rate is 15 percent, compounded quarterly?
Year0=$0 Year1=$200 Year2=$200 Year3=$200. (WITH EXPLANATION PLEASE and Manual + Calculator solution)
In: Finance
Find the EAR in each of the following cases: (Use 365 days a year. Do not round intermediate calculations. Round the final answers to 2 decimal places.)
| Stated Rate (APR) | Number of Times Compounded | Effective Rate (EAR) | |||||||
| 11.0 | % | Quarterly | % | ||||||
| 20.0 | Monthly | ||||||||
| 16.0 | Daily | ||||||||
| 13.0 | Infinite | ||||||||
In: Finance