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please i need it all solved urgently Janicek Power Co. Assume that the corporate tax rate is 20%; market risk premium is 8% and risk
please i need it all solved urgently
Janicek Power Co. Assume that the corporate tax rate is 20%; market risk premium is 8% and risk free rate is 6%. Calculate and comment on the WACC. - Debt: 6,000 bonds outstanding at a coupon rate of 10%, $1000 par value, 15 years to maturity, selling for 90% of par, the bonds make semi-annually payments. - Common stark: 6,000 shares outstanding, selling for $75 per share; beta is 1.10. - Preferned Stock: 6,000 shares of 5.5 percent preferred stock outstanding, currently selling for \$85. 2. Prepare a capital Budgeting Desition for a firm in the 34% marginal tax bracket with a 45% of required rate of return or cost of capital. The project we are considering involves the introduction of a new electronic scooter line by Raymobile. - Cost of new plant and equipment: $97,000 -Shipping and installation cost: \$ 3,000 -Unit Sales: Year Unit sold 123455,00010,00010,0007,0005,000 - Sales price per unit: $25/ unit in year 14,$30/ unit in year 5 - Variable cost per unit: $8/ unit - Annual fixed costs: $50.000 - Working Capital Requirement: There will be an initial working capital requirement of $10.000 just to get production started. Then, for each year , the total investment in NWC will be equal to 10% of the dollar value of sales for that year. Finally, all working capital is liquidated at the termination of the project at the end of year 5 . - The Depretiation Method: We used the simplified straight-line method over 5 years. It is assumed that the plant and equipment will have no salvage value after 5 years. Given the following information, 4) Determine the free cash flows associated with the project, s) Calculate and comment on the project's NPV? 4) Calculate and comment on the project's Discounted Payback Period? 3. A project have the following estimated data: price 805 per unit, variable costs 42$ per unit, fixed costs =5000$, required return=15\%, initial investment =13,000S, life four ycars. Ignoring the effect of taxes, what is the accounting break-even quantity? The financial break even quantity? Explain your result in detail Step by Step Solution
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