Value a company generating $1,000 from today growing at a rate of 1% forever. Use an opportunity cost of capital of 5% A) 25,250 B) 26,000 Ⓒ25,000 D) 26,250
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- Assuming a cost of capital of 5% and that $60,000 is the correct profit estimate each year for the next 10 years, what is the IRR if NPV=463,304 a. 32.0% b. 8.1% c. 21.0% d. 2.8%OLA #11.1 A company is considering an investment that requires an immediate investment of $475,000 and an additional investment of $125,000 in year 3. The investment will generate annual profits of $170,000 for five years, starting from year 2. a. Calculate the IRR for this investment. b. If the cost of capital is 7.5%, should the company undertake the investment? Yes or No Kindly add all the decimals DO NOT ROUNDIf a company has a business development plan for 8 years, it makes an initial capital investment of IDR 300,000,000 with MARR = 10%. Year 1 2 3 4 5 6 7 8 Income 85,260,000 96,740,000 135,250,000 109,320,000 148,610,000 125,250,000 98,750,000 75,350,000 Cost 36,210,000 38,450,000 52,278,000 48,570,000 75,950,000 65,430,000 55,450,000 49,250,000 a) Calculate the NPV? b) Calculate the Payment Period with the same data? Net Cash Flow 49,050,000 58,290,000 82,972,000 60,750,000 72,660,000 59,820,000 43,300,000 26,100,000
- What is the net present value of a capital investment project that has the followingaftertax cash flows for a company that requires a 15% rate of return on the project?Time Cash Flow0 -$4,0001 5002 2,0003 5,000What is the payback period of a project that requires an investment of $1500 to and generates cash flows of $800 in year 1, $800 in year 2, $1000 in year 3, and $1000 in year 4? Assume a cost of capital of 7% A 3.07 years B 1.88 years C 2.93 years D 2.07 years E 1.12 yearsCompany has a capital structure of 45% equity and 55% debt It just paid out a dividend of $2.00 per share and the company has $1, 500,000 of retained earnings The dividends are expected to grow at 7.0% per year in perpetuity. Company shares are currently trading at $21.00. The Underwriter will charge issuing expenses of 8.0% on the existing share market value. The tax rate of company is 40%. What is company's cost of retained earning? A 10.19% B 17.70% C 5.71% D 17.19% E 18.08% F 16.52%Consider a project with a net investment of $40,000 and the following net cash flows: Annual Cash Flow Year 1 $25,000 Year 2 $36,000 Year 3 $8,000 If the company's cost of capital is 5%, what would be the net present value of the project? a. $19,560 b. $19,800 c. $20,900 d. $23,373 Between equity and debt capital a. Debt is safer than equity b. No option is correct c. Both debt and equity are equally risky d. Equity is riskier than debt
- What is the present worth of a project with an initial investment of $8,000 and a net annual income of $2,500 for 6 years? MARR = 13%. a. -$8,000 b. $4,151 c. $9,994 d. $7,000 e. $1,994 Clear my choiceMMC Company wants to install the recycle plant that cost $80,000 with 10% cost of capital. Year 0 1 2 3 Annual Cash flow -80,000 45,000 30,000 25,000 Calculate: a. Discounted payback period (DPBP) b. Annual Worth (AW) c. Internal rate of return (IRR)OLA #11.1 A company is considering an investment that requires an immediate investment of $475,000 and an additional investment of $125,000 in year 3. The investment will generate annual profits of $170,000 for five years, starting from year 2. a. Calculate the IRR for this investment. b. If the cost of capital is 7.5%, should the company undertake the investment? Please reply using algebra in details
- A4 9c We find the following information on NPNG (No-Pain-No-Gain) Inc.: EBIT = $2,000,000Depreciation = $250,000Change in net working capital = $100,000Net capital spending = $300,000 These numbers are projected to increase at the following supernormal rates for the next three years, and 5% after the third year for the foreseeable future: EBIT: 20%Depreciation: 10%Change in net working capital: 15%Net capital spending: 10% The firm’s tax rate is 35%, and it has 1,000,000 outstanding shares and $8,000,000 in debt. We have estimated the WACC to be 15%. c. Calculate the firm’s share price at time 0.ASAP!! DO PART 4 and 5 Sufain Limited planning to invest in a project with an initial investment of Rs. 2,000,000. Following is the sales forecast for 5 years of useful life. Cost of Capital 8%. Year Cash Flows (Rs.) 1 600,000 2 750,000 3 960,000 4 1,200,000 5 1,350,000 Required: Net present value (NPV) Internal Rate of Return (IRR) Simple payback period Discounted payback period Accounting Rate of ReturnA project requires an investment of $1000 and generates a cash flow of $1000 in 1 year and another $1000 in 5 years. What is the IRR? A. 16.87% B. 25.13% C. 32.47% D. 38.16%