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Hello, having some issues with this weeks homework. Would appreciate it if you show me how its done. In the instructions it asks for these
Hello, having some issues with this weeks homework. Would appreciate it if you show me how its done. In the instructions it asks for these questions to be done in Excel using formulas. Thank you in advance.
Question 1 0 / 1 point Find the Payback period for the following project: Initial Outlay $8,620 Year 1 $3,650 Year 2 $3,270 Year 3 $3,990 Year 4 $5,400 The answer should be calculated to two decimal places. Answer: (2.43) Question 2 0 / 1 point Find the Payback period for the following project: Initial Outlay $18,700 Year 1 $5,010 Year 2 $5,570 Year 3 $5,660 Year 4 $7,380 The answer should be calculated to two decimal places. Answer: (3.33) Question 3 0 / 1 point Find the Discounted Payback period for the following project. The discount rate is 6% Initial Outlay $8,827 Year 1 $3,755 Year 2 $3,440 Year 3 $5,687 Year 4 $6,072 Round the answer to two decimal places. Answer: (2.47) Question 4 0 / 1 point Find the Discounted Payback period for the following project. The discount rate is 9% Initial Outlay $17,058 Year 1 $5,873 Year 2 $5,725 Year 3 $5,647 Year 4 $8,749 Round the answer to two decimal places. Answer: (3.40) Question 1 Find the net present value (NPV) for the following series of future cash flows, assuming the company's cost of capital is 6.00 percent. The initial outlay is $409,675. Year 1: 151,099 Year 2: 199,473 Year 3: 127,504 Year 4: 150,675 Year 5: 159,960 Round the answer to two decimal places. Answer: (256,336.43) Question 2 0/1 point Tall Trees, Inc. is using the net present value (NPV) when evaluating projects. You have to find the NPV for the company's project, assuming the company's cost of capital is 11.03 percent. The initial outlay for the project is $327,354. The project will produce the following after-tax cash inflows of Year 1: 199,164 Year 2: 100,893 Year 3: 84,291 Year 4: 176,292 Round the answer to two decimal places. Answer: (111,453.77) Question 3 0/1 point Green Landscaping, Inc. is using net present value (NPV) when evaluating projects. Green Landscaping's cost of capital is 14.78 percent. What is the NPV of a project if the initial costs are $1,900,240 and the project life is estimated as 8 years? The project will produce the same after-tax cash inflows of $483,796 per year at the end of the year. Round the answer to two decimal places. Answer: (286,504.38) Question 4 0/1 point A project has an initial outlay of $2,921. It has a single payoff at the end of year 6 of $8,697. What is the net present value (NPV) of the project if the company's cost of capital is 10.08 percent? Round the answer to two decimal places. Answer: (1,966.86) on 1 0 / 1 point A project has an initial outlay of $1,294. It has a single cash flow at the end of year 5 of $4,170. What is the internal rate of return (IRR) for the project? Round the answer to two decimal places in percentage form. "units" box) Answer: (26.37) Problem 16-4 (%) (Write the percentage sign in the on 2 0 / 1 point Deep Waters, Inc. is using the internal rate of return (IRR) when evaluating projects. Find the IRR for the company's project. The initial outlay for the project is $356,300. The project will produce the following after-tax cash inflows of Year 1: 160,500 Year 2: 28,500 Year 3: 150,700 Year 4: 143,800 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. Answer: (13.09) Problem 16-5 on 3 (%) 0 / 1 point Find the internal rate of return (IRR) for the following series of future cash flows. The initial outlay is $546,200. Year 1: 173,600 Year 2: 145,600 Year 3: 125,800 Year 4: 145,300 Year 5: 166,300 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. Answer: (12.08) Question 4 (%) 0/1 point Find the modified internal rate of return (MIRR) for the following series of future cash flows if the company is able to reinvest cash flows received from the project at an annual rate of 9.09 percent.The initial outlay is $335,300. Year 1: $159,300 Year 2: $141,000 Year 3: $136,400 Year 4: $189,200 Year 5: $167,000 Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box) Answer: (23.01) Question 5 (%) 0/1 point Tall Trees, Inc. is using the modified internal rate of return (MIRR) when evaluating projects. The company is able to reinvest cash flows received from the project at an annual rate of 14.61 percent. What is the MIRR of a project if the initial costs are $2,196,600 and the project life is estimated as 10 years? The project will produce the same after-tax cash inflows of 700,000 per year at the end of the year. Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box) Answer: (20.30) on 1 (%) 0 / 1 point Find the profitability index (PI) for the following series of future cash flows, assuming the company's cost of capital is 7.36 percent. The initial outlay is $339,950. Year 1: $144,395 Year 2: $157,730 Year 3: $151,764 Year 4: $157,207 Year 5: $157,887 Round the answer to two decimal places. Answer: (1.83) Question 0 / 1 2 point Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining's cost of capital is 12.28 percent. What is the PI of a project if the initial costs are $2,258,700 and the project life is estimated as 6 years? The project will produce the same after-tax cash inflows of $378,014 per year at the end of the year. Round the answer to two decimal places. Answer: (0.68) Question 0 / 1 3 point Good Morning Food, Inc. is using the profitability index (PI) when evaluating projects. You have to find the PI for the company's project, assuming the company's cost of capital is 10.00 percent. The initial outlay for the project is $328,249. The project will produce the following end-of-the-year after-tax cash inflows of Year 1: $142,595 Year 2: $118,989 Year 3: $181,593 Year 4: $301,313 Round the answer to two decimal places. Answer: (1.74) Question 0 / 1 4 point A project has an initial outlay of $2,622. It has a single payoff at the end of year 6 of $8,280. What is the profitability index (PI) of the project, if the company's cost of capital is 9.78 percent? Round the answer to two decimal places. Answer: -Tax cost of debt financing on 1 (1.80) 0 / 1 point Black Hill Inc. sells $100 million worth of 25-year to maturity 6.93% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $975 for each $1,000 bond. What is the beforetax 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. Answer: (7.15) (%) After-Tax cost of debt financing 0 / 1 point on 2 Great Seneca Inc. sells $100 million worth of 23-year to maturity 14.94% annual coupon bonds. The net proceeds (proceeds after flotation costs) are $977 for each $1,000 bond. The firm's marginal tax rate is 40%. What is the after-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. Answer: (9.18) (%) on 1 0 / 1 point Calculate the cost of new common equity financing of stock Q using Gordon Model Round the answers to two decimal places in percentage form (Write the percentage sign in the "units" box) Last Year Dividend Growth Rate of Dividends Selling Price of Stock Floatation Costs Cost of Common E Stock Q Answer: $4.63 3% $76.95 $2.24 ? (9.38) (%) 0/1 point Question 2 Last year the Black Water Inc. paid dividends $2.81. Company's dividends are expected to grow at an annual rate of 5% forever. The company's common stock is currently selling on the market for $59.32. The investments banker will charge flotation costs $2.75 per share. Calculate the cost of common equity financing using Gordon Model. Round the answers to two decimal places in percentage form. the "units" box). (Write the percentage sign in Answer: (10.22) (%) 0/1 point Question 3 Paul Sharp is CFO of Fast Rocket Inc. He tries to determine the cost of equity financing for his company. The stock has a beta of 2.05. Paul estimated that the market return is 8.35%. The current rate for 10-year Treasury Bonds is 4.81%. Calculate cost of common equity financing using CAPM - SML formula. Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) Answer: (12.07) (%) 0/1 point Question 4 Nature Food Inc. needs to estimate the cost of financing on preferred stock. The firm has preferred stock outstanding that pays a constant dividend of $2.17 per year. That preferred stock is currently selling for $87.98. However, the underwriter would charge flotation costs of $4.94 per share. What is the form's cost of preferred stock financing? Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) Answer: (2.61) Question 5 (%) 0/1 point The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firm's beta is 0.81. The rate on six-month T-bills is 2.69%, and the return on the S&P 500 index is 7.09%. What is the appropriate cost for retained earnings in determining the firm's cost of capital? Round the answers to two decimal places in percentage form. the "units" box). (Write the percentage sign in Answer: (6.25) (%) 0/1 point Question 6 Heavy Rain Corporation just paid a dividend of $3.36 per share, and the firm is expected to experience constant growth of 2.12% over the foreseeable future. The common stock is currently selling for $55.00 per share. What is Heavy Rain's cost of retained earnings using the Gordon Model (DDM) approach? Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) Answer: (8.36) (%) on 1 0 / 1 point Given the following information on Big Brothers, Inc. capital structure, compute the company's weighted average cost of capital (WACC). The company's 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 51% 10.39% Preferred Stock 17% 14.53% Common Stock Please calculate it 14.28% Answer: (10.22) Question 2 (%) 0/1 point The Black Bird Company plans an expansion. The expansion is to be financed by selling $16 million in new debt and $27 million in new common stock. The before-tax required rate of return on debt is 5.70% percent and the required rate of return on equity is 16.60% percent. If the company is in the 34 percent tax bracket, what is the weighted average cost of capital? Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box) Answer: (11.82) Question 3 (%) 0/1 point Garden Tools Inc. has bonds, preferred stock, and common stocks outstanding. The number of securities outstanding, the current market price, and the required rate of return for these securities are stated in the table below. The firm's tax rate is 35%. Calculate the firm's WACC adjusted for taxes using the market information in the table. Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) The Number of Securities Outstanding Selling price The Required Rate of Return Bonds 1,685 $1,186 8.16% Preferred Stocks 5,407 $78.43 19.43% Common Stocks 1,650 $94.56 15.96% Answer: (8.27) (%)Step by Step Solution
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