Answered step by step
Verified Expert Solution
Question
1 Approved Answer
solve from 1-15 Financial feasibility Study for Investment Projects The Cost of Capital, Projects PR1, PR2 and PR3 The New CUCO decided that the ninth
solve from 1-15
Financial feasibility Study for Investment Projects The Cost of Capital, Projects PR1, PR2 and PR3 The "New CUCO" decided that the ninth capital budget of the company can be absorbed in one of two investment alternatives both of them are exempted from the income taxes. The NCFs in LE milllon and the IRR of No NCF is to be reinvested and the Board should reach, before the start of 2023, to the optimal investment decision. Ear anidance. the PV of LE 1. i.e. 1/(1+r)n: Round-up the PV of the annual NCF to the nearest LE 1, then ignore any positive or negative NPV of less than LE 30. 1. The total PVs of all the annual NCFs of the five years of operating of the combined NCFs of PR1 and PR3 together using the 20% discount rate is in LE million: A. 99.996000 B.99.996010C.99.996012 D. 99.669012 2. The NPV of the combined NCFs of PR1 and PR3 together using the 20% discount rate is about in LF, B. PR1 C. PR1 and PR3 together D. PR3 5. The actual WACC of the existing investment is in LE million: A.148.2B.125.4C.152.1 D. (125.4) A.152.1B.148.2C.(152.1) 7. The expected optimal minimum amount of WACC is in LE milic 7. The expected optimal minimum amount of WACC is in LE million: A.152.1B.148.2C.(152.1) 8. The expected optimal capital structure is in LE million: A. 624 Owned Capital and 156 Borrowed Capital C. 390 Owned Capital and 390 Borrowed Capital D. 546 Owned Capital and 234 Borrowed Capital 9. The absolute change in dividends which equals the absolute change in interest charges is in: A. The first line of finance B. The second line of finance C. The third line of finance D. The fourth line of finance 10. The additional loan which the company should arrange to finance part of the total investmen costs of the ninth project is in LE million: total investment costs of the ninth project is in LE million: A. 72 B. 312 C. 468 D. 48 12. The expected amount of the Overall Marginal Cost of Capital (OMCC) where the actual and th. optimal amounts of WACCs are considered is in LE million: A.125.413.TheexpectedrateoftherightOMCCis:B.148.2 C. 28.2 D. 22.8 13. The expected rate of the right OMCC is: A.19%B.20% 14. The comparison between the IRR of PR2 and its related expected rate of OMCC results in a growtl rate of: A.1%B.(2%)C.2%D.(1%) A. The second alternative C. Inside the company B. The first alternative D. None of the above Financial feasibility Study for Investment Projects The Cost of Capital, Projects PR1, PR2 and PR3 The "New CUCO" decided that the ninth capital budget of the company can be absorbed in one of two investment alternatives both of them are exempted from the income taxes. The NCFs in LE milllon and the IRR of No NCF is to be reinvested and the Board should reach, before the start of 2023, to the optimal investment decision. Ear anidance. the PV of LE 1. i.e. 1/(1+r)n: Round-up the PV of the annual NCF to the nearest LE 1, then ignore any positive or negative NPV of less than LE 30. 1. The total PVs of all the annual NCFs of the five years of operating of the combined NCFs of PR1 and PR3 together using the 20% discount rate is in LE million: A. 99.996000 B.99.996010C.99.996012 D. 99.669012 2. The NPV of the combined NCFs of PR1 and PR3 together using the 20% discount rate is about in LF, B. PR1 C. PR1 and PR3 together D. PR3 5. The actual WACC of the existing investment is in LE million: A.148.2B.125.4C.152.1 D. (125.4) A.152.1B.148.2C.(152.1) 7. The expected optimal minimum amount of WACC is in LE milic 7. The expected optimal minimum amount of WACC is in LE million: A.152.1B.148.2C.(152.1) 8. The expected optimal capital structure is in LE million: A. 624 Owned Capital and 156 Borrowed Capital C. 390 Owned Capital and 390 Borrowed Capital D. 546 Owned Capital and 234 Borrowed Capital 9. The absolute change in dividends which equals the absolute change in interest charges is in: A. The first line of finance B. The second line of finance C. The third line of finance D. The fourth line of finance 10. The additional loan which the company should arrange to finance part of the total investmen costs of the ninth project is in LE million: total investment costs of the ninth project is in LE million: A. 72 B. 312 C. 468 D. 48 12. The expected amount of the Overall Marginal Cost of Capital (OMCC) where the actual and th. optimal amounts of WACCs are considered is in LE million: A.125.413.TheexpectedrateoftherightOMCCis:B.148.2 C. 28.2 D. 22.8 13. The expected rate of the right OMCC is: A.19%B.20% 14. The comparison between the IRR of PR2 and its related expected rate of OMCC results in a growtl rate of: A.1%B.(2%)C.2%D.(1%) A. The second alternative C. Inside the company B. The first alternative D. None of the aboveStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started