CASE STUDIES IN FINACE CASE STUDY 3: ESTIMATING THE COST OF CAPITAL QUESTION 1: a)b)c) The Capital Assets Price Model (CAPM) is used to describe the relationship between risk and expected return and is often used to estimate a cost of equity (Investopedia‚ 2009). The cost of equity(COE) of the discount rate is: R = Rf + β*(E - Rf) (1) Rf = Risk free rate of return‚ usually U.S. treasury bonds β = Beta for a company E = Expected return of the market
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Nike Inc. Case Number 2 Nike Incorporated’s cost of capital is a vital element when addressing opportunities regarding top-line growth and operating performance. Weighted Average Costs of Capital (WACC) is an essential estimation that is needed in order to determine the amount of interest that will be paid for each additional dollar financed. This translates to be the minimum overall required rate of return that the firm will keep. We disagree with Johanna Cohen’s assessment of Nike due to two
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lexicon‚ money is used for trading in the forms of banknotes and coins. As cited to Ko CH (2013)‚ the video “The High Price of Materialism” (Centernewdream 2011) in America showed that more or less 150 billion dollars are utilized to execute buyer messages in any accessible space consistently. Money is to use to replace system barter. Nowadays people are satisfied with their happy life instead of buying a lot of goods and earning more money to achieve their dream. However‚ is the more money the people
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Hoàng Hồng Thủy – LQT40A THE DIFFERENCES BETWEEN BRITISH ENGLISH AND AMERICAN ENGLISH INTRODUCTION Those people who complain about the difficulties of learning German‚ don’t know how lucky they really are - they only have one language to master. Admittedly‚ there are regional differences of dialect in German-speaking countries‚ but the non-native speaker who has learned Hochdeutsch (high or standard German) should have no problems in making himself understood by citizens of Germany‚ Austria or Switzerland
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Sanitation generally refers to the provision of facilities and services for the safe disposal of human urine and faeces. An improved sanitation facility is one that hygienically separates human excreta from human contact. Improved sanitation generally involves physically closer facilities‚ less waiting time‚ and safer disposal of excreta. Poor sanitation is responsible for one of the heaviest existing disease burdens worldwide. The diseases associated with poor sanitation and unsafe water account
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15 million VND per item (excluding VAT). The total transportation and testing cost is 5 million VND. Their estimated useful life is 5 years. Required: 1. You are asked to create a depreciation table for these equipments‚ using these following methods: a. Straight line method b. Double declining balance method c. Sum of years’ digits method 2. Compare their depreciation expenses and rates‚ then comment on their capital recovery rates. (Assume that this enterprise pay VAT by the tax deduction method)
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parks‚ swimming pools‚ golf courses‚ health club facilities‚ party rooms‚ theatre or media rooms‚ bike paths‚ community centers‚ services‚ or garages. Intangible amenities might include pleasant views‚ nearby activities‚ good schools (in the case of residential real estate) ‚ or a low crime rate‚ all of which add to the desirability of a property. A small number of people also use the word “amenity” for lavatory‚ bathroom and personal hygiene facilities.2 People who open their own restaurant
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team blames the manufacturing team for not having a vision and not being ‘market-oriented’ or ‘customer-oriented’ for that matter. On the other hand‚ the manufacturing team: “The marketing people have no understanding of costs‚
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Independent Projects Edelman Engineering is considering including two pieces of equipment‚ a truck and an overhead pulley system‚ in this year’s capital budget. The projects are independent. The cash outlay for the truck is $17‚100 and that for the pulley system is $22‚430. The firm’s cost of capital is 14%. After-tax cash flows‚ including depreciation‚ are as follows: Year Truck Pulley 1 $5‚100 $7‚500 2 $5‚100 $7‚500 3 $5‚100 $7‚500 4 $5‚100 $7‚500 5 $5‚100 $7‚500 Calculate the IRR‚ the
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ACCTNG 3402 – Financial Accounting and Reporting II Assignment due February 13‚ 2013 Spring‚ 2013 Depreciation: Airplanes and Garbage Trucks Your answers to the questions below should be clear‚ well-written‚ free of grammar and spelling errors‚ double-spaced with margins of at least one inch on all sides‚ and word-processed. In preparing this assignment‚ you may discuss the issues with each other or with anyone else‚ but your written answers must be your own work. If you need to quote someone
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