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# It is a multiple-choice question. Just part (c) requires explanation with the answer.

It is a multiple-choice question. Just part (c) requires explanation with the answer.

## Finance Assignment | Professional Writing homework essay help

A proposal to build a \$187 million factory is being contemplated to produce a new product. The factory is expected to last 20 years (but can be depreciated immediately according to current accounting rules). The factory is expected to produce 8000 units per year that are expected to be sold for a price of \$26,000 each. Variable costs (production labor, raw materials, marketing, distribtuion, etc.) are expected to be \$17,000 per unit. Fixed costs (administration, maintenance, repairs, utliities, insurance, real estate taxes, etc.) are expected to be \$16 million per year. The tax rate is 21%.

The project will require \$24 million in inventory (raw materials and finished products) as well as \$42 million in receivables (credit for customers). An extra \$11 million in cash is required as a safety stock to provide financial flexibility (that enables avoiding running out of cash in case of temporary declines in demand). Suppliers (companies which sell the parts and raw materials that are used in the production of the 8000 units produced by the factory) are expected to provide short-term trade credit that is expected to sum to \$17 million in accounts payable

COST OF EQUITY IS 4.668%

Compute the NPV if prices and all costs were expected to rise by 2% per year due to expected inflation

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## Finance Assignment | Professional Writing homework essay help

It is a multiple-choice question. Just part (c) requires explanation with the answer.

The free cash flow to the firm was just reported as \$205 million. The interest expense to the

firm is \$36 million. If the tax rate is 35% and the net debt of the firm increased by \$25

million, how much is the market value of equity if the FCFE is expected to grow at 2.35%

forever and the cost of equity is 10.63%?

A)

\$1,445

million

B)

\$1,554

million

C)

\$2,445

million

D)

\$2,554

million

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## Finance Assignment | Professional Writing homework essay help

Company Z provides financial services for its customers. They have debt of \$25 million of which they pay \$1.2 million per annum in interest expense.

They have \$105 million in common stock at 6%. The company’s Beta is 1.15 and the risk-free rate is 2.5%. The tax rate is 40%. What is the cost of debt? What is the cost of equity? What is the WACC?

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## Finance Assignment | Professional Writing homework essay help

Which of the following statements is TRUE? Select one: a. The dividend on a common stock is an example of an annuity. b. Because most preferred stocks are perpetuities, their value can be determined by dividing the investor’s required return by the annual dividend.

c. A coupon bond that sells at its par value (ie, market value equals the face value) has positive expected capital gains. d. The amount of the preferred stock dividend is generally fixed, either as a dollar amount or as a percentage of the par value,

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## Finance Assignment | Professional Writing homework essay help

Jane s Shop has a cost of debt of 6%, and a cost of equity of 12%. The firm has 100 shares of common stock outstanding at a market price of \$20 a share.

lue of \$500 and sells at 102% of face value. Its WACC is 9.3591% and its marginal tax rate is 34%. What is its constant dividend per share, to the nearest cents?

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## Finance Assignment | Professional Writing homework essay help

Valuing closed-end Investment Funds XLM is a closed-end investment fund that is currently trading at \$17.37. The fund has \$120 million worth of total investments in different securities, which is calculated based on the day’s closing prices for each individual asset.

It also has \$6 million of cash and cash equivalents on hand, as well \$3.5 million in total receivables and accrued income for the day is \$52,000. The fund has \$15 million in short-term liabilities, \$2.6 million in long-term liabilities and accrued expenses for the day are \$12,000. The fund has 5.8 million shares outstanding. How much of a premium or discount is the fund currently trading at?

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## Finance Assignment | Professional Writing homework essay help

Cost recovery. Richardses’ Tree Farm, Inc. purchased a new aerial tree trimmer for \$93,000. It is classified in the property class category of a single-purpose agricultural and horticultural structure. Then the company sold the tree trimmer after four years of service. If a seven-year life and MACRS, E , was used for the depreciation schedule, what is the after-tax cash flow from the sale of the trimmer (use a 40% tax rate) if a. the sales price was \$30,000? b. the sales price was \$29,053.20? c. the sales price was \$22,000? a. If the sales price is \$30,000, what is the after-tax cash flow? \$ (Round to the nearest cent.)

b. If the sales price is \$29,053.20, what is the after-tax cash flow? \$1 (Round to the nearest cent.) c. If the sales price is \$22,000, what is the after-tax cash flow? ound to the nearest cent.) MACRS Fixed Annual Expense Percentages by Recovery Class Click on this icon to download the data from this table Year 1 2 3-Year 33.33% 44.45% 14.81% 7.41% 5-Year 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 7-Year 14.29% 24.49% 17.49% 12.49% 8.93% 8.93% 8.93% 4.45% 5 10-Year 10.00% 18.00% 14.40% 11.52% 9.22% 7.37% 6.55% 6.55% 6.55% 6.55% 3.28% 6 8 9 10 11

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## Finance Assignment | Professional Writing homework essay help

Firm XYZ has 10 shares of common stock outstanding at a price per share of \$45 and a rate of return of 14%. The firm has 5 shares of 7% (per par 100) preferred stock outstanding at a price of \$55 a share.

The outstanding debt has a total face value of \$200 and a market price equals to par (100% face value). The yield-to-maturity on the debt is 8.00%. What is the firm’s weighted average cost of capital if the marginal tax rate is 34%?Enter percentage, round to 2 decimal places.

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## Finance Assignment | Professional Writing homework essay help

National Trucking has paid an annual dividend of \$1.00 per share on its common stock for the past fifteen years and is expected to continue paying a dollar a share long into the future.

Given this, one share of the firm’s stock is Select one: a. worth \$1 a share in the current market b. priced the same as a \$1 perpetuity c. equal in value to the present value of \$1 paid one year from today d. worthless as it offers no growth potential

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## Finance Assignment | Professional Writing homework essay help

The Power of Compounding Rick and Bob are two investors that are the same age and are both planning on contributing to the same investment for the next 30 years. The investment is expected to return 8% per year over the entire savings period.

Rick is planning on investing \$25 at the end of each week and Bob is planning on contributing only at the end of each year. How much extra cash-flow must Bob direct towards his investment each year in order to equal the compounding effect realized by Rick’s savings plan?

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## Finance Assignment | Professional Writing homework essay help

Procter and Gamble (PG) paid an annual dividend of \$2.88 in 2018. You expect PG to increase its dividends by 7.8% per year for the next five years (through 2023), and thereafter by 2.8% per year.

If the appropriate equity cost of capital for Procter and Gamble is 7.3% per year, use the dividend-discount model to estimate its value per share at the end of 2018. The price per share is \$ . (Round to the nearest cent.)

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## Finance Assignment | Professional Writing homework essay help

A proposal to build a \$187 million factory is being contemplated to produce a new product. The factory is expected to last 20 years (but can be depreciated immediately according to current accounting rules). The factory is expected to produce 8000 units per year that are expected to be sold for a price of \$26,000 each. Variable costs (production labor, raw materials, marketing, distribtuion, etc.)

are expected to be \$17,000 per unit. Fixed costs (administration, maintenance, repairs, utliities, insurance, real estate taxes, etc.) are expected to be \$16 million per year. The tax rate is 21%. The project will require \$24 million in inventory (raw materials and finished products) as well as \$42 million in receivables (credit for customers). An extra \$11 million in cash is required as a safety stock to provide financial flexibility (that enables avoiding running out of cash in case of temporary declines in demand). Suppliers (companies which sell the parts and raw materials that are used in the production of the 8000 units produced by the factory) are expected to provide short-term trade credit that is expected to sum to \$17 million in accounts payable

COST OF EQUITY= 4.668%

Compute equivalent annual cash flow (EAC) and compare that to another project with an annual EAC of \$12 million that can alternatively be selected (and re-evaluate the project in this context)

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## Finance Assignment | Professional Writing homework essay help

The principal P is borrowed at a simple interest rater for a period of time t. Find the simple interest owed for the use of the money.

Assume 360 days in a yea P = \$14,000, r = 5%, t= 60 days The simple interest owed is \$ (Do not round until the final answer. Then round to the nearest cont as needed.) Enter your answer in the answer box

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