Jimenez, Inc., is an all-equity firm. The cost of the companys equity is currently 11.2 percent and
Question:
Jimenez, Inc., is an all-equity firm. The cost of the company’s equity is currently 11.2 percent and the risk-free rate is 3.4 percent. The company is currently considering a project that will cost $11.6 million and last six years. The company uses straight-line depreciation. The project will generate revenues minus expenses each year in the amount of $3.5 million. If the company has a tax rate of 23 percent, should it accept the project?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 62% (8 reviews)
Concerning whether the company should accept the project I can say that the answer i...View the full answer
Answered By
James Warinda
Hi! I’m James Otieno and I'm an experienced professional online tutor with countless hours of success in tutoring many subjects in different disciplines. Specifically, I have handled general management and general business as a tutor in Chegg, Help in Homework and Trans tutor accounts.
I believe that my experience has made me the perfect tutor for students of all ages, so I'm confident I can help you too with finding the solution to your problems. In addition, my approach is compatible with most educational methods and philosophies which means it will be easy for you to find a way in which we can work on things together. In addition, my long experience in the educational field has allowed me to develop a unique approach that is both productive and enjoyable.
I have tutored in course hero for quite some time and was among the top tutors awarded having high helpful rates and reviews. In addition, I have also been lucky enough to be nominated a finalist for the 2nd annual course hero award and the best tutor of the month in may 2022.
I will make sure that any student of yours will have an amazing time at learning with me, because I really care about helping people achieve their goals so if you don't have any worries or concerns whatsoever you should place your trust on me and let me help you get every single thing that you're looking for and more.
In my experience, I have observed that students tend to reach their potential in academics very easily when they are tutored by someone who is extremely dedicated to their academic career not just as a businessman but as a human being in general.
I have successfully tutored many students from different grades and from all sorts of backgrounds, so I'm confident I can help anyone find the solution to their problems and achieve
0.00
0 Reviews
10+ Question Solved
Related Book For
Corporate Finance
ISBN: 9781260772388
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
Question Posted:
Students also viewed these Business questions
-
A company is considering a project that will require a cost outlay of $15 000 per year for four years. At the end of the project the salvage value will be $10 000. The project will yield returns of...
-
A company is considering a project that will require a cost outlay of $30 000 per year for four years. At the end of the project, the company expects to salvage the physical assets for $30 000. The...
-
The Green Fiddle is considering a project that will produce sales of $87,000 a year for the next four years. The profit margin is 6 percent, the project cost is $96,000, and depreciation is...
-
Assume that the Central bank decides to sell government bonds to the commercial banks. a.) Use the demand and supply curves for loanable funds to show the effect of this measure on the interest rate....
-
The density of a plastic part used in a cellular telephone is required to be at least 0.70 g/cm3. The parts are supplied in large lots, and a variables sampling plan is to be used to sentence the...
-
Find out what database management systems are available at your university for student use. Investigate what physical file and database design decisions need to be made. Compare this list of...
-
Doering Company, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2013 and 2014. 2013 Pesos (Mexico) ............ $0.1055 Yen (Japan)...
-
Salari Industries, a small, family- run manufacturer, has adopted an ABC system. The following manufacturing activities, indirect manufacturing costs, and usage of cost drivers have been estimated...
-
ASSIGNMENT #6 A firm that wants to raise $21 million has 500,000 common shares outstanding, with a current market value of $15 per share. The firm's tax rate is 40 percent. (a) The alternatives are...
-
The issue of resource utilization shows up in different forms in different types of operating systems. List what resources must be managed carefully in the following settings: a. Mainframe or...
-
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $40. a. Suppose you buy 10 contracts of the February 38 call option. How much will...
-
Knotts, Inc., an all-equity firm, is considering an investment of $1.32 million that will be depreciated according to the straight-line method over its four-year life. The project is expected to...
-
In Exercises 19 through 32, either find the given limit or show it does not exist. If the limit is infinite, indicate whether it is + or . lim x 1 + x0+
-
The current rate of interest on S-T Treasury Bills = 10%, intermediate term Gov. Bonds = 11%, Lt- Gov. Bonds = 12%, AA rate Corp. Bonds = 13.5% and the rate of inflation is 5%. Holding-period returns...
-
Prepare Income Statement(absorption costing) for the second, third and fourth month. SALES (SP X unit sold) INCOME STATEMENT FORMAT (ABSORPTION COSTING) XXX Less: Cost of Goodsold VARIABLE COST (VC...
-
The following shows the distribution of final exam scores in a large introductory psychology class. The proportion under the curve is given for two segments (short answers-no calculations required)....
-
How much overhead was included in the cost of Job #461 at the beginning of January? * (1 Point). BREAD Co. uses a job order costing system. At the beginning of January, the company had 2 jobs in...
-
3. (3pt.) A state of a physical system is just a description of the system at an instant in time in terms of its properties. In classical mechanics, states are represented by points (in phase space)....
-
a. Find the linear function C = f(F) that gives the reading on the Celsius temperature scale corresponding to a reading on the Fahrenheit scale. Use the facts that C = 0 when F = 32 (freezing point)...
-
Fahrad Inc. sells all of its product on account. Fahrad has the following accounts receivable payment experience: Percent paid in the month of sale .........10 Percent paid in the month after the...
-
Operating and Cash Cycles is it possible for a firms cash cycle to be longer than its operating cycle? Explain why or why not. Use the following information to answer Questions Last month, Blue-Sky...
-
Operating and Cash Cycles is it possible for a firms cash cycle to be longer than its operating cycle? Explain why or why not. Use the following information to answer Questions Last month, Blue-Sky...
-
Operating and Cash Cycles what impact did this change in payables policies have on Blue-Skys operating cycle, its cash cycle?
-
FINANCIAL STATEMENT ANALYSIS INSTRUCTIONS 1. PREPARE RATIO ANALYSIS REPORT ( word file) Format 1. Introduction 2. Importance of Financial Statements 3. Importance of Financial statement analysis and...
-
Let us assume that Europe is in recession, China's economy is slowing down, and the US economy is growing at 1-2%. Use these assumptions to invest in 4 ETFs (electronically traded funds). The 4 ETFs...
-
A section 83(b) election creates ordinary income at the time of the grant. Ture or False
Study smarter with the SolutionInn App