Question
I have gotten the first half of my answers done, but i am having a lot of trouble with the second half. Please help me
I have gotten the first half of my answers done, but i am having a lot of trouble with the second half. Please help me
1.CF1 = 75CF2 = 75 CF3 = 75 d = 15%
FIND:Present Value (PV)
2.CF = 100g = 0d = 20%
Assume the Cash Flow is annual and perpetual
FIND:PV
3.CF0 = -100(this is the investment)
CF1 = 30CF2 = 50 CF3 = 60 CF4 = 90 WACC = 12%
FIND:Payback in Years
4.Based upon the information in #3,FIND:Net Present Value (NPV)
5.Next year?s numbers include these:
EBIT = 1,000Depreciation = 250Taxes = 100
Net increase in Working Capital = 50
Net Increase in Capital Expenditure = 250
Long-term sustainable growth = 4%
Risk free rate = 3%Beta = 1.5%
Equity Risk Premium = 7%
D/E = 0.333
Investment = -$10,000 (occurs at time = 0)
Cost of debt (prior to tax adjustment) = 7%
Corporate tax rate = 33%
FIND:Net Present Value (NPV). Use CFFA for cash flow and WACC for the discount rate.
6.CF0 = -6,750CF1 = 3,000CF2 = 3,000CF3 = 3,000
WACC = 14%FIND:NPV
7.RFR = 2%Beta = 1.1ERP = 6.0%D/E = 1.0
Cost of debt prior to tax adjustment = 4%
Corporate tax rate = 35%
FIND:WACC
8.CF0 = -1,000CF1 = 50 CF2 = 250CF3 = 450
CF4 = 200CF5 = 1,200WACC = 8%
FIND:NPV
9.Given the cash flows in the problem above, FIND the Payback, in years.
10.Given these cash flow numbers for next year:
Net Income = 4,000
Interest Expense = 500
Depreciation = 800
Net increase in Working Capital = 100
Net Capital Expenditure = 900
Taxes = 1,000
Initial Investment = -25,000(occurs at time = 0)
Risk free rate = 5%
Beta = 2.0
ERP = 7.5%
D/E = 0.5
Cost of debt capital prior to adjustment = 6%
Corporate tax rate = 35%long term stable growth = 2.5%
FIND:NPV(use CFFA1 and WACC)
F 301 DUE: June 22nd Assignment 5 1. CF1 = 75 CF2 = 75 FIND: Present Value (PV) CF3 = 75 d = 15% 2. CF = 100 g=0 d = 20% Assume the Cash Flow is annual and perpetual FIND: PV 3. CF0 = -100 (this is the investment) CF1 = 30 CF2 = 50 CF3 = 60 FIND: Payback in Years 4. Based upon the information in #3, FIND: CF4 = 90 WACC = 12% Net Present Value (NPV) 5. Next year's numbers include these: EBIT = 1,000 Depreciation = 250 Taxes = 100 Net increase in Working Capital = 50 Net Increase in Capital Expenditure = 250 Long-term sustainable growth = 4% Risk free rate = 3% Beta = 1.5% Equity Risk Premium = 7% D/E = 0.333 Investment = -$10,000 (occurs at time = 0) Cost of debt (prior to tax adjustment) = 7% Corporate tax rate = 33% FIND: Net Present Value (NPV). Use CFFA for cash flow and WACC for the discount rate. 6. CF0 = -6,750 CF1 = 3,000 CF2 = 3,000 CF3 = 3,000 WACC = 14% FIND: NPV 7. RFR = 2% Beta = 1.1 ERP = 6.0% Cost of debt prior to tax adjustment = 4% Corporate tax rate = 35% FIND: WACC 8. CF0 = -1,000 CF4 = 200 FIND: NPV CF1 = 50 CF5 = 1,200 CF2 = 250 CF3 = 450 WACC = 8% D/E = 1.0 9. Given the cash flows in the problem above, FIND the Payback, in years. 10. Given these cash flow numbers for next year: Net Income = 4,000 Interest Expense = 500 Depreciation = 800 Net increase in Working Capital = 100 Net Capital Expenditure = 900 Taxes = 1,000 Initial Investment = -25,000 (occurs at time = 0) Risk free rate = 5% Beta = 2.0 ERP = 7.5% D/E = 0.5 Cost of debt capital prior to adjustment = 6% Corporate tax rate = 35% long term stable growth = 2.5% FIND: NPV (use CFFA1 and WACC)Step by Step Solution
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