Question
Find the net present value (NPV) for the following series of future cash flows, assuming the companys cost of capital is 13.57 percent. The initial
Find the net present value (NPV) for the following series of future cash flows, assuming the companys cost of capital is 13.57 percent. The initial outlay is $346,897.
Year 1: 151,782
Year 2: 152,908
Year 3: 173,713
Year 4: 139,628
Year 5: 127,498
Round the answer to two decimal places.
Your Answer:
3.
A project has an initial outlay of $2,774. It has a single cash flow at the end of year 4 of $4,755. What is the internal rate of return (IRR) for the project?
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
Your Answer:
4. Find the profitability index (PI) for the following series of future cash flows, assuming the companys cost of capital is 9.12 percent. The initial outlay is $405,826.
Year 1: $140,542
Year 2: $181,757
Year 3: $144,962
Year 4: $131,610
Year 5: $150,851
Round the answer to two decimal places.
Your Answer:
5.
Black Hill Inc. sells $100 million worth of 20-year to maturity 13.12% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $981 for each $1,000 bond. What is the before-tax cost of capital for this debt financing?
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
You should use Excel or financial calculator.
6.
Given the following information on Big Brothers, Inc. capital structure, compute the companys weighted average cost of capital (WACC). The companys marginal tax rate is 40%.
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
Type of Capital | Percent of Capital Structure | Before-Tax Component Cost |
---|---|---|
Bonds | 48% | 13.46% |
Preferred Stock | 17% | 17.81% |
Common Stock | Please calculate it | 15.34% |
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