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4. Super Computer Company's stock is selling for OR 70 per share today. It is expected that, at the end of the first and second
4. Super Computer Company's stock is selling for OR 70 per share today. It is expected that, at the end of the first and second year, it will pay a dividend of OR4 and OR5 respectively. Then, the share will be sold for OR 85 per share. Calculate the expected rate of return for the shareholders. 5. Ahmed Company is considering a proposal to produce and market sweets. It will involve an investments of OR 25,000 that can be depreciated for tax straight-line over 10 years. In each of years 1-10, the project is forecasted to produce sales of OR 15,000, and to incur variable costs of 40% of sales and fixed costs of OR 5.000. The corporate tax rate is 7%, and the cost of capital is 10%. a. What is project NPV? b. Calculate the break-even point. Explain how you would interpret the break-even figure. 6. Discuss the reasons why a company should prepare a cash budget
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