Daniel's Market is considering a project with an initial cost of $176,500. The project will not produce any cash flows for the first three years. Starting in Year 4, the project will produce cash inflows of $127,500 a year for three years. This project is risky, so the firm has assigned it a discount rate of 17 percent. What is the project's net present value?

1. Which of the following is likely to be the largest?

A.) Cost of revenues

B.) Selling, General & Administrative

C.) Amortization of Intangibles

D.) Research & Development

2. Which of the following are non-cash expenses?

A.) Cost of revenues

B.) Selling, General & Administrative

C.) Amortization of Intangibles

D.) Research & Development

3. Which accounts may include depreciation?

A.) Cost of Goods Sold

B.) Selling, General & Administrative

C.) Research & Development

D.) All of the above

1. What is usury, and how does it relate to the cost of consumer credit?

What could be some ramification of waiting to observe actual cost?

Drongo Corporation is considering an investment with a payback of five years and a cost of $12000. If the required return is 8%, what is the worst-case NPV? Explain. Show working out.

eg, NPV = cost/(1 + required return)^t – cost

Which of the following assets accounted for under the cost model will not be carried at cost less accumulated depreciation

Select one:

a. Motor vehicles

b. Land

c. Plant and Equipment

d. Office Furniture and Fixtures

This quiz is based on the following information:
Calculate the cost of capital for company with the following capital structure
>1,500,000 ordinary shares, market price R4 per share. Last dividend was 93c per share. Dividend growth was 14% for past 5 years
>1,000,000 12%, R1 preference shares with market value of R3 per share
>R1,000,000 9% debenture due in 7 year and the current YTM is 10%
>R1,300,000 15% bank loan, due in June 2024
>Company tax rate is 30%

For life insurance policies, some of the premium pays for the cost of the insurance, and the remainder goes toward the cash value of the policy and earns interest like a savings account. Consider the following insurance company options. Company 1: pays 4.9% compounded monthly on the cash value of their policies Company 2: pays 4.93% compounded semiannually on the cash value of their policies What is the APY offered by each company? (Round your answers to the nearest hundredth.)

Company 1 %

Company 2 %

Which company offers a higher yield? Company 1 Company 2

Assume that the cost of capital (discount rate) for the question that follows is equal to 0.18 (this is a decimal not a percentage)

Consider the following capital budgeting project.

You are considering investing in a business that will cost $200,000 and will create free cash flows at the rate of $30,000 per year for the next 10 years. Your cost of capital was given in the first question. Use that cost of capital in this question.

Within EXCEL compute the following and attach your file to this post.

What is the payback of the project? If you require a payback under 7 years do you accept or reject the project?

What is the discounted payback of the project? If you require a discounted payback under 7 years do you accept or reject the project?

What is the internal rate of return of the project? Do you accept or reject the project given your cost of capital?

What is the MIRR of the project? Do you accept or reject the project given your cost of capital?

What is the NPV of the project? Do you accept or reject the project?

Within the EXCEL spread sheet create a NPV profile of the project using interest rates from 0 to 20% at increments of 1%.

.