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
Premium Net present value Corporate finance Internal rate of return
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
Premium Finance Net present value Investment
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
Premium Net present value
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
Premium Net present value Internal rate of return Rate of return
$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
Premium Net present value Cash flow Rate of return
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
Premium Net present value 2012 Business
Arundel predicts to profit from this idea. If we use straight PV analysis of all the movies‚ by using the PV of Inflow at Yr4 and PV of Negative cost at Yr3‚ we can calculate the NPV of each movie at Yr0. Since the total NPV for all 6 studios is negative‚ we will not purchase all the sequel rights if we use this simple NPV analysis. However‚ MCA Universal and TCFOX have positive NPV’s and hence we are willing to pay up to $4.47M for each sequel of MCA Universal and $6.08M for each sequel of The Walt
Premium The Walt Disney Company Walt Disney Option
and its cost of capital is 10%. Based on this information you are to complete the following tasks. Prepare a statement showing the incremental cash flows for this project over an 8-year period. Calculate the Payback Period (P/B) and the NPV for the project. Based on your answer for question 2‚ do you think the project should be accepted? Why? Assume Superior has a P/B (payback) policy of not accepting projects with life of over three years. If the project required additional investment
Premium Net present value Cash flow Finance
Consolidated Edison Inc. Time-trend and peer group ratio analysis The first step in analyzing Edison Consolidated INC. was to conduct a time trend analysis‚ in which we compared the different ratios of the firm from the years 2009 to 2011. The results show a decrease of 4.59% in Profit margin‚ which could be attributed to the expansion of the firm and the acquisition of new assets. At the same time the ROE shows an increment of only 0.64%. Equity- multiplier for the firm decreased by 0.09. Based
Premium Management accounting Ratio Price
present value uses the discounted cash flow of valuation‚ which is the process of valuing an investment by discounting future cash flows. Comparison to another rule‚ which is called the Internal rate of return‚ uses the discount rate that makes the NPV of an Investment zero. IRR finds the single rate that summaries the rate of return of a project. We only depend on cash flow of a particular investment not the rates offered elsewhere. For an example‚ you let your brother burrow 100 dollars but he
Premium Net present value Internal rate of return Cash flow