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Question 2 6 The Reef Corporation has an opportunity to sell shark repellant. Oscar, the CEO, would like Sykes, the vice president, to evaluate the
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The Reef Corporation has an opportunity to sell shark repellant. Oscar, the CEO, would like Sykes, the vice president, to evaluate the project. Oscar owns all outstanding shares of the Reef Corporation. Oscar plans to receive $ in dividends at the end of the year. Oscar plans to grow the dividends at a year. Frankie, an independent financial analyst, has estimated that the bonds should sell for $ Frankie has estimated that the stock should sell for $ Frankie has estimated the beta to be Frankie estimates the market will return Lino, the godfather, will have an antidote to the repellant after five years. Don Feinberg owns all outstanding bonds. Don Feinberg receives $ interest payments every six months. Lenny, the operations manager, has estimated that they will need pieces of equipment that cost $ each. Installation will be a flat $ Lenny estimated that they will need $ more in inventory. Lenny believes that the equipment will be worth $ after the fiveyear run. Lenny has estimated the cost will be per unit. Lenny estimates that fixed cost will be $ Lola, the marking manager, believes the repellant will sell for $ Lola believes the demand will be able to sell in year ; in year ; in year ; in year ; and in year Angie, the CFO, says the equipment will fall under a year MACRS. Angie estimates that accounts payable will increase by $ and accounts receivables will increase by $ Angie has estimated the tax rate as a flat The Reef Corporation bonds mature in years. The par value on the bonds is $ The coupon rate is on the bonds. Treasury bonds yield The bond risk premium is
what is the operating cash flow for year
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