Assume Highline Company has just paid an annual dividend of $0.96. Analysts are predicting an 11% per year growth rate in earnings over the next five years. After then, Highline's earnings are expected to grow at the current industry average of 5.2% per year. If Highline's equity cost of capital is 8.5% per year and its dividend payout ratio remains constant, for what price does the dividend-discount model predict Highline stock should sell? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. Problem 8-20 Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. You have 3 projects with the following cash flows: a. For which of these projects is the IRR rule reliable? b. Estimate the IRR for each project (to the nearest 1% ). c. What is the NPV of each project if the cost of capital is 5%?20%?50% ? a. For which of these projects is the IRR rule reliable? The IRR rule is reliable for b. Estimate the IRR for each project (to the nearest 1% ). Project 1 Project 2 Project 3 c. What is the NPV of each project if the cost of capital is 5%?20%?50% ? Project 1 Project 2 Project 3 Beryl's Ieed Tea currently rents a bottling machine for $50,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options a. Purchase the machine it is currently renting for $150,000. This machine will require $20,000 per year in oneoing maintenance expenses. b. Purchase a new, more advanced machine for $250,000. This machine will require $15,000 per year in ongoing maintenance expenses and will lower bottling eosts by $10,000 per year. Also, $35,000 will be qent upfront in trainithe the new operators of the machine. Suppose the appropriate discount rate is 8% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the rental of the machine. Assume also that the machines will be depreciated via the straight-line method over seven years and that they have a 10-year life with a negligible salvage value, The marginal corporate tax rate is 21%. Should Beryl's Iced Tea continue to rent, parchase its current machine, of purchase the advanced machine? Complete the steps below using cell neferences fo given data or previans calculations. In some cases, a simple cell reference is all you need. To copy/puste a formala across a row or down a colaus, an ahodure cell neference ar a mixed cell nefereace may be preferred. If a specifie Excel function is to be used, the directions will specify the nee of that functian. Do not type in nunutical data into a cell ar functian. Lnztead, make a reference to the cell in which the data is found. Make your comptarians only in the blue cells atighlighted below. in all cases, whiles ouherwise directed, ws the earliest appearance of the dara in yow fovmelas, wally the Given Data section. Assume Highline Company has just paid an annual dividend of $0.96. Analysts are predicting an 11% per year growth rate in earnings over the next five years. After then, Highline's earnings are expected to grow at the current industry average of 5.2% per year. If Highline's equity cost of capital is 8.5% per year and its dividend payout ratio remains constant, for what price does the dividend-discount model predict Highline stock should sell? Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. Problem 8-20 Complete the steps below using cell references to given data or previous calculations. In some cases, a simple cell reference is all you need. To copy/paste a formula across a row or down a column, an absolute cell reference or a mixed cell reference may be preferred. If a specific Excel function is to be used, the directions will specify the use of that function. Do not type in numerical data into a cell or function. Instead, make a reference to the cell in which the data is found. Make your computations only in the blue cells highlighted below. In all cases, unless otherwise directed, use the earliest appearance of the data in your formulas, usually the Given Data section. You have 3 projects with the following cash flows: a. For which of these projects is the IRR rule reliable? b. Estimate the IRR for each project (to the nearest 1% ). c. What is the NPV of each project if the cost of capital is 5%?20%?50% ? a. For which of these projects is the IRR rule reliable? The IRR rule is reliable for b. Estimate the IRR for each project (to the nearest 1% ). Project 1 Project 2 Project 3 c. What is the NPV of each project if the cost of capital is 5%?20%?50% ? Project 1 Project 2 Project 3 Beryl's Ieed Tea currently rents a bottling machine for $50,000 per year, including all maintenance expenses. It is considering purchasing a machine instead, and is comparing two options a. Purchase the machine it is currently renting for $150,000. This machine will require $20,000 per year in oneoing maintenance expenses. b. Purchase a new, more advanced machine for $250,000. This machine will require $15,000 per year in ongoing maintenance expenses and will lower bottling eosts by $10,000 per year. Also, $35,000 will be qent upfront in trainithe the new operators of the machine. Suppose the appropriate discount rate is 8% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the rental of the machine. Assume also that the machines will be depreciated via the straight-line method over seven years and that they have a 10-year life with a negligible salvage value, The marginal corporate tax rate is 21%. Should Beryl's Iced Tea continue to rent, parchase its current machine, of purchase the advanced machine? Complete the steps below using cell neferences fo given data or previans calculations. In some cases, a simple cell reference is all you need. To copy/puste a formala across a row or down a colaus, an ahodure cell neference ar a mixed cell nefereace may be preferred. If a specifie Excel function is to be used, the directions will specify the nee of that functian. Do not type in nunutical data into a cell ar functian. Lnztead, make a reference to the cell in which the data is found. Make your comptarians only in the blue cells atighlighted below. in all cases, whiles ouherwise directed, ws the earliest appearance of the dara in yow fovmelas, wally the Given Data