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please let me know if you can help. I have attached the 3 questions i need answered Question 7 A utility company that currently provides
please let me know if you can help. I have attached the 3 questions i need answered
Question 7 A utility company that currently provides electricity to residents of Broward County using coal-fired power plants has WACC of 9%. The company's new CEO is looking into getting into a new project where the company is going to collect highly radioactive material from asteroid in space and will use that material to generate electricity. This is expected to reduce the cost of producing electricity. The initial investment in the project is $640 million. A newly hired Nova graduate has done the following analysis. His analysis contains multiple errors. Identify the errors, correct them, Calculate true NPV assuming that NI forecasts for the years are OK and that there are no relevant cash flows beyond 2022. Recommend a course of action. (Hint: make appropriate assumptions if required. There is no right answer. I want to see if you can identify the errors, make proper adjustments and assumption and complete the project.) [10] 2018 EBITDA 300 Depreciation 55 EBIT 245 Interest 45 EBT 200 Tax 80 NI 120 Cash Flows (NI + Dep) 175 NPV calculation at beginning of 2015 Discount rate 9% t CF 1 2 0 3 0 4 175 5 190 6 211 7 223 8 PV of FCF 0 223 $607.18 NPV = ($32.82) Recommendation Reject (numbers in millions) Question 8 You have identified the following information for the competitors of DMD that you are analyzing. Given that the firm has 100M shares outstanding how much should it be worth in the market? Market cap NI Volume Stock price Lets do it 12B 150M 890M 52 No way 15B 120M 80M 41 got to do it 18B 158M 900M 15 get it done 10B 34M 85M 12 DMD 152M Question 3 Given the following information find the unknown and explain the logic in words [10+5]. spot rate Yuan per USD 180-day forward 4.95 1-yr forward ? Rupee per USD 57.44 Interest rates USA 0.02 Europe 0.01 India 0.08 China 0.09 5.26 1.32 USD per Euro 5.12 1.3 59.15 59.85Step by Step Solution
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