Given the data in the following table, what is the equivalent annual series (EAS) for Project A? NOTE: The cost of capital for both Project A and Project B is 11%. 1) $54.83 2) None of the answers in this list is within $0.20 of the correct answer. 3) $28.96 4) $39.90 5) $49.96 6) $52.39 Using the data in the following table, which project adds the most value to the firm? 1) A 2) B 3) C 4) D 5) All of the projects increase the value of the firm equally. Using the information in the following table, what is the WACC of the firm? Dunawary Industries is evaluating the idea of expanding their production facility in Cobb County. The CFO gathered the following data. - Dunaway Industries spent $500,000 researching other sites for their expansion. - The equiporent needed for the expansion will eost $25,600,000 fully installed The equipment will be depreciated over 20 year to a salvage value of 51,000,000. Dunaway Industries uses straight-line depreciation. If Dunaway aceepts the project, the company will sell the equipment for salvage value (i.e., S1,000,000) at the end of the life of the project. - If Dunaway Industries adds the new equipment, sales are expected to increase by $17,400,000 and costs are expected to increase by $10,000,000. - The appropriate tax rate for Dunaway Industries is 30% - The capital of the firm includes 70% of equity and 30% of debt. - Dunaway industries recently issued a bond with 30 years to maturity that pays a coupon of 7.50% sem iannually. The $1,000 par bond sold for $956.77. - The market believes that Dunaway Industries will pay a dividend of $2.42 (D) =2.42) on their common stock next year and that the dividend will grow at 4.00% forever. The current stock price is $22.00. 1) 12.15% 2) 12.28% 3) 12.88% 4) 12.69% Dunaway lndustries is evaluating the idea of expanding their production facility in Cobb County. The CFO gathered the following data - Dunaway Industrics spent $500,000 researching other sites for their expansion. - The equipment needed for the expansion will cost $25,600,000 fully installed. The equipment will be deprociated over 20 years to a salvage value of $1,000,000. Dunaway Industries uses straight-line depreciation. If Dunaway accepts the project, the company will sell the equipment for salvage value (i.e, S1,000,000) at the end of the life of the project. - If Dunaway Industries adds the new equipment, sales are expected to inerease by $17,400,000 and costs are expected to increase by $10,000,000. - The appropriate tax rate for Dunaway Industries is 30% - The capital of the firm includes 70% of equity and 30% of debt. - Dunaway Industries recently issued a bond with 30 years to maturity that pays a coupon of 7.50% scm iannually. The $1,000 par bond sold for $956.77. - The market believes that Dunaway Industries will pay a dividend of $2.42 (D1 =2.42 ) on their common stock next year and that the dividend will grow at 4.00% forever. The current stock price is $22.00. 1) $5,567,000 2) $5,900,000 3) $5,237,000 4) $5,552,000 5) $5,549,000
