2011-12 Sem 2 Written Assignment Name: Shi Yu ID: 10821504d Tutor: Ho Ming Lawrence FUNG Q1: Definition of efficient market: The efficient market is defined as a market where competition among investors should work to eliminate all positive-NPV trading opportunities or‚ equivalently‚ that securities with equivalent risk should have the same expected return based on their future cash flows‚ given all information that is available to investors. Definition of arbitrage: It is known as the
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Question 1: How would you describe HPL and its position within the private label personal care industry? HPL is a major player in private label personal care industry. Private labels hold around 19% (around $4 billion) of personal care industry (around $21.6 billion). HPL holds approximately 28% share of this private label personal care market. Even though HPL is a small player in overall private label market with the revenues of approximately $700 million compared to overall private label market
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RISKS LOCATION RISKFlooding due to typhoons may occur since they have decided to put up the hatchery near the coastal waters of Calauag Bay. Thus‚ overflowing of the fishponds may occur which would then lead to the fingerlings‚ juveniles‚ mature groupers to be carried by the floods. Furthermore‚ most aqua culture development centers are in the Visayas region. Thus‚ if unforeseen problem occurs in the growth of their fishes‚ they are far from the help of the experts in aqua culture. INPUT RISK
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Cost-reduction investment- installing more efficient equipment‚ Mandatory investment- government regulated‚ safety material. NPV = PV of inflows – Cost= Net gain in wealth.. If projects are independent‚ accept if the project NPV > 0. If projects are mutually exclusive‚ accept projects with the highest positive NPV‚ those that add the most value. In this example‚ accept S if mutually exclusive (NPVS > NPVL)‚ and accept both if independent. [pic] [pic] [pic] [pic] Quiz Internal rate of return‚ IRR
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Fourth Examination – Finance 3320 – Spring 2011 (Moore) R-Number: ____________________ Printed Name: ____________________ Ethical conduct is an important component of any profession. The Texas Tech University Code of Student Conduct is in force during this exam. Students providing or accepting unauthorized assistance will be assigned a score of zero (0) for this piece of assessment. Using unauthorized materials during the exam will result in the same penalty. Ours’ should be a self-monitoring
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not turn the project unprofitable. Broadly defined political/country risk must be considered and accepted by Maple‚ if project is to happen. Hedge possibilities for those two risk categories are limited. We recommend going on with the investment – NPV for Maple is around $ 12 Mio assuming constant RMB/USD rate‚ and remains positive under all plausible FX scenarios. On the basis of profitability considerations‚ we reject full Rmb financing option. With some reservations‚ we support back-to-back deal
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is monthly. What is the NPV of the loan? (Enter just the number without the $ sign or a comma; round off decimals.) You entered: 80 Your Answer 80 Total Score 5.00 5.00 / 5.00 Explanation Correct. You know compounding and figuring out NPV. https://class.coursera.org/introfinance-003/quiz/feedback?submission_id=41317 Página 1 de 9 Quiz Feedback | Introduction to Finance 12/07/13 18:50 Question Explanation This is a simple NPV problem‚ where the loan is positive NPV only because Sachin cannot
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Q1. Peirson: Chapter 5: Questions 2‚ 3‚ 4‚ 5‚ 6‚ 10 and 11. Chapter 5 2. What factors does the required rate of return of a project reflect? Soln: The required rate of a return for a project reflects the rate of return that could be generated by investing in the next best alternative investment. This discount rate reflects the return required by the firm as compensation for having funds tied up in the project. The compensation demanded increases as the uncertainty‚ or risk‚ associated
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$100‚000 with a balance of $100‚000 due at the 5th year mark. 12 b.) The NPV of project A is determined by taking the cash inflows minus the investment cost for Project A which will give you a net value of $18‚272. -$100‚000 for project A is the companies expense amount for funding the project. NPV = $118‚272 - $100‚000 = $18‚272 The NPV for Project B equals the present value of $1.00 for 5 years at 0.11 which yields a NPV of $18‚600. In order to find the present value of the $200‚000 for the
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respond to the following questions: 1. Investment appraisal should add value to the business entity. Critically evaluate this view. [40 %) 2. Calculate each project’s payback‚ NPV and IRR. (12 %) 3. For each of the above methods which projects should be selected and why? (6 %) 4. What would happen to the NPV if the cost of capital changed? (6 %) 5. How does a change in the cost of capital affect the
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