Hello there nice to finally meet with you again. I am needing help with a final in corporate finance.

Part A: Answer each of the following questions in one to three sentences, and perform calculations as requested. Each answer is worth eight points. 1. The following table summarizes a portion of U.S. federal corporate tax rates for the 2007 tax year. Explain whether corporate tax rates are progressive, regressive, or flat. Use a very simple example from the table to make your position and explanation clear. Taxable Income ----Taxable Income Tax Rate More Than Less Than $0 $50,000 15% $50,001 $75,000 25% $75,001 $100,000 34% 2. Recall that the net present value (NPV) and internal rate or return (IRR) techniques take the time value of money into consideration. Compare and contrast these two techniques, focusing on IRR when the NPV is positive, zero, and negative. Be sure to include a discussion of the NPV discount rate in your response. (Continued) 0605901 November 07, 2016 Proctored Final Examination 1 3. Recall that the security market line (SML) illustrates the relationship between systematic risk and expected returns. Perhaps the most famous and practical application of the SML is the capital asset pricing model (CAPM), as follows: E(R,) = R f + [E(RM) GRf x a. Define each of the variables or terms in this equation. b. Calculate the E(R,), assuming that E(RM ) equals 12%, R f equals 6%, and 11 equals 1.2. 4. Describe the differences between an ordinary annuity, an annuity due, and a perpetuity. 5. Assume that a project has a negative net present value (NPV) of $500 and an internal rate or return (IRR) of 10/0. Is the discount rate used to calculate the NPV higher than, lower than, or equal to 10%? Compare and contrast these two techniques, using this example, and focusing on IRR when the NPV is positive, zero and negative. Part B: Answer each of the following questions in a composition of 1-2 paragraphs, or perform calculations as requested. Each answer is worth 20 points. 6. Explain the concept of venture capital. Include a definition of the term venture capital, describe who will need to obtain venture capital financing, and explain the type of return that's required from a venture capital firm. 7. In a typical loan amortization, the principal component of a fixed payment increases and the interest component decreases with each payment. The following figure illustrates this relation for a hypothetical 30-year mortgage. Proctored Final Examination Mortgage Principal & Interest CiJnspuric..nt of Payrrtent Prinuipal Component iJ Pityrriunt 360 Monthly Payments Assume that someone borrows $5,000 at an interest rate of 9 percent per year for five years, and agrees to make interest and principal payments in the amount of $1,285.46 at the end of each year. Prepare a loan amortization schedule for each of the five years, showing the beginning principal balance, the total payment of $1,285.46, the interest component of the payment, the principal component of the payment, and the ending principal balance. Fill in the blank spaces in the following framework to complete your answer: LOAN AMORTIZATION SCHEDULE For a Loan of $5,000 at 9% Interest, Over 5 Years , Beginning Total Interest Principal Ending Balance Payment Paid Paid Balance 1 $5,000.00 $1,285.46 ? ? ? 2 ? $1,285.46 ? ? ? 3 ? $1,285.46 ? ? ? 4 ? $1,285.46 ? ? ? 5 ? $1,285.46 .,_? ? ? $6,427.30 ? $5,000.00 Year Total Proctored Final Examination 8. The weighted average cost of capital (WACC) can be related to the basic accounting equation, as follows: A = L + OE Compare and contrast the WACC to this basic accounting equation. Does the WACC contain a profit component? How does the WACC relate to the discount rate used in a net present value (NPV) computation, using a case where NPV equals zero to make your point? Proctored Final Examination