solve the question following
The cash flow plan associated with a debt finance ing transaction allowed a company to receive $2,800,000 now in lieu of future interest payments of $196,000 per year for 10 years plus a lump sum of $2,800,000 in year 10. If the company's effect live tax rate is 33%, determine the company's cost of debt capital (a) before taxes and (b) after taxes. A company that makes several different types of skateboards, Jennings Outdoors, incurred interest expenses of $1,200,000 per year from various types of debt financing. The company borrowed $19,000,000 in year 0 and repaid the principal of the loans in year 15 in a lump-sum payment of $20,000,000. If the company's effective tax rate is 29%, what was the company's cost of debt capital (a) before taxes and (b) after taxes? Molex Inc., a manufacturer of cable assemblies for polycrystalline photovoltaic solar modules, re- quires $3.1 million in debt capital. The company plans to sell 15-year bonds that carry a dividend of 6% per year, payable semiannually. Molex has an effective tax rate of 32% per year. Determine (a) the nominal annual after-tax cost of debt capi- tal and (b) the effective annual after-tax cost of debt capital.A project to extend irrigation canals into an area that was recently cleared of mesquite trees (a nui- sance tree in Texas) and large weeds is projected to have a capital cost of $2,000,000. Annual mainte- nance and operation costs will be $100,000 per year. Annual favorable consequences to the gen- cral public of $820,000 per year will be offset to some extent by annual adverse consequences of $400,000 to a portion of the general public. If the project is assumed to have a 20-year life, what is the B/C ratio at an interest rate of 8% per year? Calculate the B/C ratio for the following cash flow estimates at a discount rate of 7% per year. tem Cash Flow FW of benefits, $ 30,800,000 AW of disbenefits, $ per year 105,000 First cost, $ 1,200,000 M&O costs, $ per year 400,000 Life of project, years 20 The benefits associated with a nuclear power plant cooling water filtration project located on the Ohio River are $10,000 per year forever, starting in year 1. The costs are $50,000 in year 0 and $50,000 at the end of year 2. Calculate the B/C ratio at i = 10% per year.Determine the economic service life and corre- sponding AW value for a machine that has the fol- lowing cash flow estimates. Use an interest rate of 14% per year and hand solution. Salvage Operating Year Value, $ Cost, $ per Year 100,000 75,000 -28,000 60,000 -31,000 50,00 0 -34,000 40,000 -34,000 25,000 -34,000 15,000 -45,000 0 -49,000 Use the annual marginal costs to find the economic service life for Problem 11.16 on a spreadsheet. As- sume the salvage values are the best estimates of fu- ture market value. Develop an Excel chart of annual marginal costs (MC) and AW of MC over 7 years. Keep or Replace the Kiln Case PE In Example 11.3, the market value (salvage value) series of the proposed $38 million replacement kiln (GH) dropped to $25 million in only 1 year and then retained 75% of the previous year's market value through the remainder of its 12-year expected life. Based on the experience with the current kiln, and the higher-temperature capability of the replace- ment, the new kiln is actually expected to retain only 50% of the previous year's value starting in year 5. Additionally, the heating element replace- ment in year 6 will probably cost $4 million, not $2 million. And finally, the maintenance costs will be considerably higher as the kiln ages. Starting in year 5, the AOC is expected to increase by 25% per year, not 10% as predicted earlier. The Manager of Critical Equipment is now very concerned that the ESL will be significantly decreased from the 12 years calculated earlier (Example 11.3). (a) Determine the new ESL and associated AW value. (b) In percentage changes, estimate how much these new cost estimates may affect the minimum-cost life and AW of cost estimate.Find the probability distribution for the number of jazz CDs when 4 CDs are selected at random from a collection consisting of 5 jazz CDs, 2 classical CDs, and 3 rock CDs. Express your results by means of a formula. A tire manufacturer wants to determine the inner diameter of a certain grade of tire. Ideally, the diameter would be 570 mm. The data are as follows: 572, 572, 573, 568, 569, 575, 565, 570. (a) Find the sample mean and median. (b) Find the sample variance, standard deviation, and range. (c) Using the calculated statistics in parts (a) and (b), can you comment on the quality of the tires?Suppose it is known from large amounts of historical data that X, the number of cars that arrive at a specific intersection during a 20-second time period, is characterized by the following discrete probability function: f(x) = e-65 7, for = = 0, 1,2, .... (a) Find the probability that in a specific 20-second time period, more than 8 cars arrive at the intersection. (b) Find the probability that only 2 cars arrive. L.\fFor Exercise 1.6 on page 13, compute the sample standard deviation in tensile strength for the samples separately for the two temperatures. Does it appear as if an increase in temperature influences the variability in tensile strength? Explain. Reference: Exercise 1.6: The tensile strength of silicone rubber is thought to be a function of curing temperature. A study was carried out in which samples of 12 specimens of the rubber were prepared using curing temperatures of 20 C and 45 C. The data below show the tensile strength values in megapascals. 20 C: 2.07 2.14 2.22 2.03 2.21 2.03 2.05 2.18 2.09 2.14 2.11 2.02 45"C: 2.52 2.15 2.49 2.03 2.37 2.05 1.09 2.42 2.08 2.42 2.29 2.01 (a) Show a dot plot of the data with both low and high temperature tensile strength values. (b) Compute sample mean tensile strength for both samples. (c) Does it appear as if curing temperature has an influence on tensile strength, based on the plot? Comment further. (d) Does anything else appear to be influenced by an increase in curing temperature? Explain
