Ski and Board are two identical frms of identical size operating in identeal makets. Ski is unlevered with assets valued at $13000 and has 650 shares of stock outstanding. Board aiso has $13000 in assats and has $2000 in debt financed at an interest rale of 6.00% and has 550 shares of sock outstanding. Both Ski and Boand pay tax at the rate of 30%. Cabcutate the level of EBIT that would make earnings per share the same for 36 and Board. 1 Place your answer to the neareat dollar. If applicable, your ariswer should NOT inckide a comma A small acoourting firm is considering the purchase of a computer sotware package that would greatly reduce the amount of time needed to prepare tax forms. The sofware costs \$1750 and this expense will be incurred immediately. The firm estmales that it will save $725 of cash flow at the end of each year boginning in one year for 9 consecidive years, and also save $1994 in year 10. What is the payback on the computer packinge? Years Because paybock it fypically defined as an integer (e.9.3 yoars and not as 374 yean), place your answer as an integer, A retaler is locking to expand operations at all of their stores for an initial investment of $660. This investment will be depreciated on a straight line basis over the project's 10 year life. The exparsion ls expected to produce annual cash inhaws of $530 in consecuitive years over the life of the project beginning one year from today, while also producing annual cash outfiows of $350 in conseculive years over the Hife of the project, ahso begining one year from today. What is the project's NPV if the corporate tax raile is 36% and the project's required rate of relum is 11% ? Place your answer in dolass and cents without the use of a dollar sign of a comma. If applicable, negative values shauld be entered with a minus sign in frant of the number. Work all analysis out using at least 4 decimal places of accuracy. This question is a variant of the Sport Hotel example that was presented in class, in the class notes, and in the Real Option chapter, The change to consider is this: suppose that the value of the hotel is one of two values: $8.7 milion if the city is successful in obtaining the franchise (and not $8 million as in the original problem) or $3.5 it the city is not successful in obtaining the franchise (and not $2 milion as in the original problem). Al oher aspects of the problem afe the same as originally prosented, such as the costs per year. Assume that the probabilty of obtaining the franchiee is 50%. Incorporating these new ho values from above, and the real option, what is the new NPV of the prolect? million Place your answer in milions of dolars using at least three docimal places. For example, the answet of nine hundred soventy five thousand would be entered as 0.975 and not as 975000
