1. It is a capital budgeting problem. Assume that XYZ company wants to invest in a new project that needs $2.65 billion (time 0). It is expected that it will give cash flows as given below.

Find the NPV and IRR of the project. Should you accept the project? Discuss in details why you accept or reject the project. Assume WACC is 10%.

2. If the firm wants to reduce its WACC (from 10% to 8%), how should the company do it? (think about it, I am not helping in this question).

Dividends Per Share Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 80,000 shares of cumulative preferred 3% stock, $20 par and 410,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $30,000; second year, $75,000; third year, $100,000; fourth year, $100,000. Determine the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0.00". 1st Year 2nd Year 3rd Year 4th Year Preferred stock (dividends per share) $ $ $ $ Common stock (dividends per share)

City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $20,800. In addition, City paid sales tax and title fees of $1,390 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $6,980.

Required
a. Using the straight-line method, compute the depreciation expense for Year 1 and Year 2. (Round your answers to the nearest whole dollar amount.)
b. Assume the van was sold on January 1, Year 3, for $18,522. Determine the amount of gain or loss that would be recognized on the asset disposal. (Amounts to be deducted should be indicated with minus sign. Round the intermediate calculations to nearest whole dollar amount.)

Depreciation by Three Methods; Partial Years

Perdue Company purchased equipment on April 1 for $65,070. The equipment was expected to have a useful life of three years, or 7,020 operating hours, and a residual valueof $1,890. The equipment was used for 1,300 hours during Year 1, 2,500 hours in Year 2, 2,100 hours in Year 3, and 1,120 hours in Year 4.

Required:

Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.

Dividends Per Share

Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 22,000 shares of cumulative preferred 4% stock, $160 par, and 73,000 shares of $15 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $94,380; second year, $197,220; third year, $229,240; fourth year, $229,860.

Compute the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0".

Dividends Per Share

Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 81,700 shares of cumulative preferred 3% stock, $15 par, and 398,200 shares of $26 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $56,000 ; second year, $77,900 ; third year, $80,700 ; fourth year, $98,800 .

Calculate the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0".

Dividends Per Share

Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 80,700 shares of cumulative preferred 3% stock, $15 par, and 399,700 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $56,700 ; second year, $76,600 ; third year, $80,000 ; fourth year, $99,400 .

Calculate the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0".

Dividends Per Share

Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 80,900 shares of cumulative preferred 2% stock, $15 par, and 398,600 shares of $24 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $55,600 ; second year, $77,800 ; third year, $78,100 ; fourth year, $101,900 .

Calculate the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0".

Dividends Per Share

Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 20,000 shares of cumulative preferred 4% stock, $130 par, and 67,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $69,600; second year, $148,400; third year, $174,410; fourth year, $184,400.

Compute the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0".