inflows of capital from future investment rounds. Nor can Accessline take the sort of steps necessary to protect its investment in the case of management failure. Should Apex make a counter-offer‚ I would suggest the following terms: Valuation: Accessline’s projected revenues in 1999 are $208m. Using the average price/revenue ratio of 3com and Boston Technologies‚ it seems reasonable to expect an IPO valuation at 3.67 times revenues‚ producing gross proceeds of $764m with a present value
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the following is NOT a capital component when calculating the weighted average cost of capital (WACC)? Choose one answer. | a. Long-term debt. | | | b. Accounts payable. | | | c. Retained earnings. | | | d. Common stock. | | | e. Preferred stock. | | Correct Marks for this submission: 1/1. Question 2 Marks: 1 For a typical firm‚ which of the following sequences is CORRECT? All rates are after taxes‚ and assume the firm operates at its target capital structure. Choose one answer
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financial decision making has been the economic instability‚ especially in prices‚ evidenced in the U.S. economy since the mid 1960’s. Inflation in the past few years has not been a major macro economic problem‚ but its spectere‚ as demonstrated by the Fed’s recent increases in interest rates‚ is never for the agendas of financial decision makers. Macro economic instability has necessitated that expectations about the future rate of inflation be taken into consideration in making decision(s) about
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Multinational Capital Budgeting International Financial Management Dr. A. DeMaskey Learning Objectives How does domestic capital budgeting differ from multinational capital budgeting? How do incremental cash flows differ from total project cash flows? What is the difference between foreign project cash flows and parent cash flows? How does APV analysis differ from NPV analysis? How is the capital budgeting analysis adjusted for the additional economic and political risks
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its potential capital budgeting projects‚ even though the projects have a wide range of nondiversifiable risk. The firm then undertakes all those projects that appear to have positive NPVs. Briefly explain why such a firm would tend to become riskier over time. Let’s start with some definitions and simple examples according to authors‚ Emery‚ Finnerty and Stowe: “Time Value of Money: The value that a capital budgeting project will create—its NPV—depends on its cost of capital‚ its required return”
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Hittle Company Ltd (Case Study) You are a financial analyst for the Hittle Company. The director of capital budgeting has asked you to analyze two proposed capital investments‚ project X and Y. Each project has a cost of $10000 and the cost of capital for each project is 12 percent. The projects expected net cash flows are as follows: |Expected Cash flows | | | | | |year
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Assignment | Cost of Capital‚ Capital Budgeting and Financial Planning | Chapter(s) | 9‚ 10‚ 12 | Group Name | | Student Name(s) | | Date | | Instructions: HW Assignments will be uploaded to Kean Blackboard and must be accessed from there. You must work in groups where assigned (or independently if not assigned to groups) on homework assignments. Points are noted against each question. You are required to submit Home Work assignments electronically on Kean Blackboard using MS-Office
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545 - = Net Realizable Value 538 532 1 Beg. allowance $20 + Bad debt expense $5 – Write-offs ? = End. Allowance $13 Write-offs = $12 2 Beg. accounts receivable $558 + Sales $5‚710 – Write-offs $12 – Collections ? = End. accounts receivable $532 Collections = $5‚711 Req. 3 2006 2007 2008 Net Income 510 497 $(312) ÷ Net Sales 4‚700 5‚695 $5‚710 = Net Profit Margin 10.85% 8.73% (5.46)% The company’s net profit margin has fallen each year while net sales have risen‚ with a net loss reported
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A budget is one of your best tools for reaching your goals – whatever your age or stage in life. It’s a plan of what money you expect to receive and how you expect to spend it. * Who should have a budget? * How to make a budget * Use the money planner * Things you need * Getting help * Tracking your spending * Making the most of your income Who should have a budget? Tip: A tight budget is harder to stick to. Be realistic. Everyone can benefit from a budget. It’s not
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9-204-109 REV: OCTOBER 23‚ 2006 MIHIR DESAI Globalizing the Cost of Capital and Capital Budgeting at AES In June 2003‚ Rob Venerus‚ director of the newly created Corporate Analysis & Planning group at The AES Corporation‚ thumbed through the five-inch stack of financial results from subsidiaries and considered the breadth and scale of AES. In the 12 years since it had gone public‚ AES had become a leading independent supplier of electricity in the world with more than $33 billion in assets
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