assume that GDP=$12, C=$3, G=$2, M–X=$1, R=6%, INF=12%. Calculate the capital investment spending
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- Working capital represents the portion of current assets financing through long term funds. This indicates 1. Net Working Capital 2. Gross Working capital Select one: O a. 2 is correct O b. Both 1 and 2 are correct O c. 1 is correct O d. Neither of the two are correct1. The CAPM model can be used to derive the cost of сapital. A. Equity B. Borrowed C. Total D. UnlimitedA net present worth equation is used to solve for a ROR by setting the net present worth equation Equal to: Select one: a. -1 b. -10 c. zero d. 1
- D3 Finance (d) The moving VWAP (MVWAP) is an indicator for long-term investment. Compare the moving VWAP and Moving Average in terms of their similarity and dissimilarity.What is the logic behind estimating FCF using Formula 1 (FCF = EBIT(1-TaxRate) + Depr – Capex – Chg NWC + Terminal CF)? Why are the mathematical signs of each variables the way they are? For instance, why is it “+ Depr” and “– Chg NWC”?(D/D+E)kd(1-T) + (E/D+E)k2 is also known as Group of answer choices The required rate of equity return The required rate of debt cost The weighted average cost of capital The average cost of equity
- Required information Problem 24-2A (Algo) Payback period, accounting rate of return, net present value, and net cash flow calculation LO P1, P2, P3 [The following information applies to the questions displayed below.] Project Y requires a $306,000 investment for new machinery with a six-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Income Project Y $ 370,000 165,760 51,000 26,000 $ 127,240Which one of the following formulas is correct? O i) Profit margin = EBIT / Sales ii) ROA = ROE / Equity multiplier %3D O ii) Capital intensity ratio = 1 / Return on assets O iv) Quick ratio = Cash / Current liabilitiesIn question C there is a plot of of cost of debt, cost of equity and cost of capital. Can you show how r_a is calculated to be 0.18667? r_d = Cost of debt r_a = cost of capital r_e = Cost of equity
- The is the cost of each financing component multiplied by that component's percent of the total funding amount. cost of capital IRR cost of debt NPVThe single sum, present worth factor: a. Can be depicted as (1 + i)−n b. Can be depicted as (P|F i%,n) c. Is represented as PV using the Excel® financial function with −1 inserted for the fv parameter d. All of the above.The followings are the instructions for this case. Provide the excel file where the computations are done. You have to use the following equation: WACC = Wd*Rd*(1-t)+We*Re. Where WACC stands for the Weighed average cost of capital, Wd is the weight of debt in the capital could be either market value weight or book value weight and it is calculated in the following way: Wd=D/(E+D), where D is either the book value of debt or the market value of debt, E is the book value of equity or the market value of equity. So keep in mind if you want Wd on book value basis, then both E and D must be on book value basis, if you want Wd on a market value basis, then both E and D must be on market value basis. Rd is the cost of debt (percentage cost of debt), t is the tax rate, We is the weight of equity in the capital could be either market value weight or book value weight, We = E/(E+D), as I explained Wd, it could be either on a book value or book value basis. Re is the cost of equity. Q1: you have…