Get college assignment help at uniessay writers Fitzgerald Industries has a new project available that requires an initial investment of $4.8 million. The project will provide unlevered cash flows of $844,000 per year for the next 20 years. The company will finance the project with a debt-value ratio of .25. The company’s bonds have a YTM of 6.5 percent. The companies with operations comparable to this project have unlevered betas of 1.24, 1.17, 1.39, and 1.34. The risk-free rate is 3.9 percent and the market risk premium is 6.9 percent. The tax rate is 24 percent. What is the NPV of this project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g. 1,234,567.89) NPV 1,315,455.23
a. Using the decision variables x4 and s4, write constraint that limits next week’s production of the 4-cylinder connecting rods too either 0 or 7,300 units. 7300 1 x4 S S4 b. Using the decision variables x6 and s6, write constraint that limits next week’s production of the 6-cylinder connecting rods to either 0 or 5,300 units. 5300 x6 S SE c. Write three constraints that, taken together, limit the production of connecting rods for next week. X4 S 7200 S4 5300 x6 S S6 S4 S6 d. Write an objective function for minimizing the cost of production for next week Min S4 X4 SE 9x
2.583BD X | 1.868CF X | X | X 2.418CI 2.033BR Маx s.t. х 0.25BR -0.75CR X 0.6BD -0.4CD X CR 1000 BR = х CD 500 BD BR, BD, CR, CD 2 0 II
North/South Airlines generated the following information from its financial statements: (1) P/E ratio equals 15.0, (2) common stock market price per share is $30, (3) fixed assets turnover equals 8.0, (4) current ratio equals 5.0, (5) current li abilities equal $300,000, (6) net profit margin equals 4 percent, and (7) 60,000 shares of com mon stock are outstanding. What are North/ South’s (a) return on assets (ROA) and (b) total 2-20 assets turnover?
Question QI.Kurt Lewin coined the term ‘Group dynamics to explain the positive and negative forces in a group, which type of force is group think? Illustrate the three antecedent conditions or causes of group think. Q2.Distinguish between a transactional leader and a transformational leader, which type of leader according to you will be suitable for a highly innovative company which is operating in an unstable environment. Give reasons for your answer. Q3. Assess which factor (Motivational or Hygiene) of Herzberg’s two factor theory will be more satisfying and motivating to employees of a software company. Justify your views by explaining the theory to support your answer. Q4. Summarize the concept of Empowerment as a development technique used by Managers in multinational organizations. Q5.Explain Fiedlers contingency model focusing on the sub elements of the model which are to be considered to judge the appropriate style of leadership. Q6 Interpret the characteristics of all the stages of group formation.
The most recent balance sheet of Infinity Infor mation Systems (1IS) shows that the company has $35 million of common equity and 7 mil lion shares of common stock outstanding. The company’s common stock has a market value equal to $8 per share. IIS’s net income was $14 million. What are lIS’s (a) P/E ratio and (b) M/B 2-14 ratio? 2-15 Smitty’s Finger-Licking BBQ has a total assets turnover equal to 2.0, a return on equity (ROE) equal to 15 percent, and a debt ratio equal to 60 percent. If Smitty’s is financed with debt and common stock, what are its (a) return on assets (ROA) and (b) net profit margin?
A company has to decide between two options for a new Option 1- Build unit product, parts will cost $125000, annual operating costs of $40000 and salvage of $72000. It has a life of 6 years and each unit costing $60 to build. Option 2: Buy the product which will cost $140 per parts of unit. product: What is the capital recovery cost of buying the parts? If it is expected to buy 1000 parts per year, what is the annual equivalent cost for building the product?
7. A cooling-water pumping station at the LCRA plant costs $600,000 to construct, and it is projected to have a 25-year life with an estimated salvage value of 15% of the construction cost. However, the station will be book-depreciated to zero over a recovery period of 30 years. Calculate the annual depreciation charge for years 4, 10, and 25, using (a) Straight line depreciation and (b) DDB depreciation (c) What is the implied salvage value for DDB?
cise 4 GBP, 000 e oject GBP A British multinational anticipates cash flows of 100 min GBP, 120 mln GBP and 160 min inves If the en ussia. three first 06 year respe e 00 return on the inve t is 17 per cent, how large does the probability of expropriation in yond. erpetu ears OP he pect nbau probal erms? Btne nent befor the i invest NPV have Assum that reaks ment элә even qual t nba e Boe hne the e w in y vent riation 360 exprop ea r 5 in Бхә
Over the next 3 years a road paving company is considering replacing their existing grading machine which was purchased 5 years ago for $950,000. Depreciation of the grading machine follows a straight line depreciation model with a predicted salvage value of $150,000 three years from now. The operation and maintenance costs of the grading machine have been increasing and are expected to be $20,000 next year, $30,000 two years from now and $50,000 three years from now. The company uses a MARR of 15% a) What is the salvage value of the grading machine in years 0, 1, and 2? Calculate the EACTotal for years 1, 2, and 3. Show ALL your work for full marks. b) c) What is the EAC* and the Economic Life of the existing grading machine? d) The road paving company went out and obtained the details on a few other replacement options which are presented in the table below. Replacement Option ЕАC* Economic Life ($) (years) 195,000 10 C 180,000 What is the best option in the table above? i. Should the existing grader be replaced and if so when?
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Assignment for Chapter 14 Perform common sizing for the assets of the two hospitals. Then describe what you learned about these two hospitals Same Year for Both Hospitals Hospital B Hospital A % $ 8,000,000 $2,000,000 Current Assets 7,500,000 30,000,000 Property, Plant
ANSWER ALL THE FOLLOWING QUESTIONS 1. From the following information you are required to prepare the Fund Flow Statement for the year ended 31st December 2019. (15 marks) 2019 (dhs) 210,000 2018 (dhs) 191,000 2018 (dhs) 241,000 2019 (dhs) 250,000 Liabilities Share Capital Assets Land and Building Machinery 60,000 45,000 Profit
Q30. An investor has $2,000 invested in stock A and $5,000 in stock B. The daily volatilities of A and B are 1.5% and 1% respectively and the coefficient of correlation is 0.8. What is the one day 99% VaR? (Note that N(-2.33)-0.01) $177 а. b. $215 $135 C. d. $331 $231 e.
2. BHP Billiton, the leading Australian mining company has its shares listed on Aus- tralian Stock Exchange and London Stock Exchange. Ignoring taxes and franking credits the dual listing is expected to converge to same share price when converting the LSE-listed BHP pounds sterling share price into Australian dollars 2.1) Does the law of one price apply to dual listing of the Australian company? 2.2) In what circumstances, can the arbitrage strategy give way to a positive gain to the investors?
1. Consider a world in which there are only two periods: period 0 and period 1 and three possible states of the world in period 1 (a good weather state, a fair weather state, and a bad weather state). Also, apples are the only product produced in this world, and they cannot be stored from one period to the next. The following abbreviations will be used: PA apple in the present period (i.e., present apple), GA = good weather apple in the next period, FA next period Suppose that an produces 160 GA, 100 FA, and 50 BA. The bond pays 40 GA, 40 FA and 40 BA. The stock pays 120 GA, 60 FA and 10 BA. The price of the bond is 36 PA, and the price of the stock is 44 PA. În addition, security C, D, and E are traded for 62 PA, 22 PA, and 20 PA respectively. Security C pays 140 GA, 80 FA, and 30 BA. Security D pays 60 GA 30 FA, and 5 BA. Security E pays 80 GA, 20 FA, and0 BA fair weather apple in the next period, BA = bad weather apple in the apple tree firm offers for sale a bond and stock. The apple tree 1.1) Find the arbitrage-free price of the atomic securities 1.2) Calculate the arbitrage-free price of an apple tree. Verify it equals the price implied by the firm’s securities. 1.3) Calculate the discount factor and explain its economic interpretation. How is it related to the risk-free interest rate?
Net 2 Weok 52 Week Symbol Oper Close %Chg PE High Low Vo Div Yield % Cha E Cha High Low Earthetone 4,276 ESTE 16.06 16.64 6.00 16 43 .47 2.94 31.0 12.11 -30.09 Energy Electromed 205 1.94 1.9- -0.02 15.5 28 1,23 13.42 -27.20 Elephant Talk Communications Ellomay Capital Magin 0 3t ETAK 0.38 0.39 0.35 65 307 1.15 0,20 63.11 9.5 ELLC 9.5 0.23 10 27 9.53 9.53 2.30 958 7 66 -1.96 .. EMAN 2.54 17.800 26C 2.50 3.74 8.62 .. Emerald Oil 2 A0 1 37 EOX 2.65 2 86 2.55 .12 BC 713 447 154 60 -89.17 .. Emerson Radio MSN 1.26 1.28 1.25 1.25 17,805 2.05 1.00 22.30 19.33 Resources 0 52 .. … 32.5e s1 502 Enservco ENSV 0.86 0.90 0.74 0,04 4,71 111,150 4.02 0.70 16.00 60.31 0.90 EnSync Entree Gold 0 53 3 Be ESNO 0.56 050 0 02 0.52 64,596 1 24 0.41 3.84 EGI 0 27 D.32 0.27 23.02 57,409 51 0.08 do 87.83 EnviroStar ERBA Diagnostics 2 B1 EV 4.89 4.96 4 77 96 1: 3,928 5.65 2 12 20.67 80.36 n a: ERE 1.98 208 1.98 3.3 2,561 4.01 1.60 36.91 67 25.50 — 25 47 25,50 31.50 1.00 392 Eurasian Minerals Evans Bancorp EMX: 0 50 0.51 14 866 2 75 EVBN 23.25 0.8 23.25 23.25 23 25 0.21 592 25 75 72 ,10 12.17 4.37 1 20 EPM 4.02 Evalution Petroleum 5.69 6.00 5.69 5,92 n28 51.750 10 31 3 38 49.33 -20.32 XRA Exeter Resource 0.35 0.38 0.35 0.36 .0 1 95,547 0.79 0.34 de 3a se
16-14 Integrative: Comparison of loan terms Cumberland Furniture wishes to é prearranged borrowing agreement with a local commercial bank. The bank’s terms for a line of credit are 3.30% over the prime rate, and each year the borrowing be reduced to zero for a 30-day period. For an equivalent revolving credit agree- ment, the rate is 2.80% over prime with a commitment fee of 0.50% on the average unused balance. With both loans, the required compensating balance is equal to 20% of the amount borrowed. (Note: Cumberland currently maintains $0 on de- posit at the bank.) The prime rate is currently 8%. Both agreements have $4 million borrowing limits. The firm expects on average to borrow $2 million during the year no matter which loan agreement it decides to use. a. What is the effective annual rate under the line of credit? b. What is the effective annual rate under the revolving credit agreement? (Hint: Compute the ratio of the dollars that the firm will pay in interest and commit- ment fees to the dollars that the firm will effectively have use c. If the firm does expect to borrow an average of half the amount arrangement would you recommend for the borrower? Explain why. must of.) available, which 2 -15 Cost of commercial paper Commercial paper is usually sold at a discount. Fan Corporation has just sold an issue of 90-day commercial paper with a face value of $1 million. The firm has received initial proceeds of $978,000. (Note: Assume a 365-day year.) a. What effective annual rate will the firm pay for financing with commercial paper, assuming that it is rolled over every 90 days throughout the year? b. If a brokerage fee of $9,612 was paid from the initial proceeds banker for selling the issue, what effective annual rate will the firm pay, assum- ing that the paper is rolled over every 90 days throughout the year? to an investment collateral Kansas City Castings (KCC) is attempting to ob- collateral. The firm ex- owed KCC by its 12 credit customers 6 Accounts receivable as tain the maximum loan possible using accounts receivable tends net-30-day credit. The amounts that the average age of each account, and the customer’s average payment period shown in the following table. as are are as
A $6M investment is considered by an electric bike manufacturing company to add a new production line for its new product, electric skateboards. The company has commissioned an exploratory study of where to place the new production line and which type of equipment to use. There are three types of machines to choose from for the company to install on the new assembly line. The machines have zero salvage value at the end of 10-year planning horizon. The company must select at least two alternatives from (i) Loan, (ii) Common Stocks, (iii) Preferred Stocks, and (iv) Retained Earnings to obtain the required amount of capital for the investment. Each of these capital sources could provide $3M to support the project. The company is anticipating rapid product penetration and aggressive growth after addition of the new production line. The major question for this case study is to find out if the project is economically justified. Part I: Cash Flow Construction Please follow this step to create the cash flow of the project and obtain its economic worth Step 1: Choose the Capital Sources and Calculate WACC Based on the instruction provided to you, choose the appropriate options to form the capital for the investment, and the calculate WACC Dividend $5, Price = $100, Growth Rate Common Stock 4%
Exhibit 1 Monthly Shipments at Selling Price (thousands of dollars) Forecast as of Forecast as of Month Actual September 2012 May 2013 6,421 2012 October 6,508 November 6,219 6,302 December 6,250 6,009 January 2013 6,074 6,170 6,006 February 5,996 March 6,291 5,197 April 6,515 4,165 Мay 6,832 3,744 50,685 44,014 Eight months total 6,759 June 12,681 July 7,374 6,645 August 6,478 7,201 September 6,433 7,394 Twelve months total 26,315 34,650 Fiscal vear total 77,000 78.664 Exhibit 2 Balance Sheets, 2012-2013 (thousands of dollars) 2012 2013 November December August September October January February March April May Cash 8,350 3,328 3,523 4,511 4,239 4,878 5,182 3,962 6,277 4,994 5,793 5,969 6,421 5,851 6,009 6,170 5,606 5,197 3,365 3,744 Accounts receivable 11,234 Inventory 7,154 21,297 7,364 16,661 7,524 7,219 17,581 7,277 17,525 7,097 18,145 7,529 18,317 8,371 17,530 12,163 20,901 Current assets 17,468 20,876 45,500 45,500 Gross PP
3NAmandaurchased stock in a German firm at a price per share of 35 euros when the US. $leuro exchange rate was $1.20. After six months Ann sold the stock for 37 euros when the U.S. $/euro exchange rate was $1.10. The stock does not pay a dividend. What is Ann’s fate of Teturn on this investment? A)3.31% B) -3.10% C) 5.7% D) 9.2% Answer: B E-09 Discuss the fundamentals of stocks and how to value them
The post Question: Fitzgerald Industries Has A New Project Available That Requires An Initial Investment Of $4.8 Million. The Project Will Provide Unlevered Cash Flows Of $844,000 Per Year For The Next 20 Years. The Company Will Finance The Project With A Debt-value Ratio Of .25. The Company’s Bonds Have A YTM Of 6.5 Percent. The Companies With Operations Comparable To … appeared first on uniessay writers.