FIN515 Homework 5 Problem 10-8: NPVs‚ IRRs‚ and MIRRs for 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 |
Premium Depreciation Generally Accepted Accounting Principles Net present value
Homework Assignment: Week 1 Mini-Case a. Why is corporate finance important to all managers? Corporate finance is important to all managers because you need to be aware of the tools needed to evaluate the firm’s value and be able to accurately make decisions to maximize wealth. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. A business may start as a sole proprietorship‚ or
Premium Tax Progressive tax Taxation
Consider two local banks. Bank A has 100 loans outstanding‚ each for $1 million‚ that it expects will be repaid today. Each loan has a 5% probability of default‚ in which case the bank is not repaid anything. The chance of default is independent across all the loans. Bank B has only one loan of $100 million outstanding‚ which it also expects will be repaid today. It also has a 5% probability of not being repaid. Explain the difference between the type of risk each bank faces. Which bank faces less risk?
Premium Stock Risk Interest
Margin = Net Income / Sales (Page 36) Starbucks: ($1.25 net income / $11.70 sales) = 0.10683 x 100 = 11% NPM Peet’s: ($17.8 net income / $372 sales) = 0.04785 x 100 = 5% NPM c. Which firm was more profitable in 2011 According to the results‚ Starbucks is more profitable by being at 58% GM and 11% NPM versus Peet’s at 20% GM and 5% NPM. 30. In mid-2012‚ Apple had cash and short-term investments of $27.65 billion‚ accounts receivable of $14.30 billion‚ current assets of $51.94 billion‚ and current
Premium Generally Accepted Accounting Principles Financial ratios Balance sheet
NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting? (Points : 10) Long-term debt Accounts payable Retained earnings Common stock Preferred stock 5. (TCO E) Duval Inc. uses only equity capital‚ and it has two equally-sized divisions. Division A’s cost of capital is 10.0%‚ Division B’s cost is 14.0%‚ and the corporate (composite) WACC is 12.0%. All of Division A’s projects are equally risky‚ as are
Premium Net present value Internal rate of return Corporate finance
10 July 2012 Managerial Finance FIN515 Professor David Felsberg DellaTorre Mini Case Corporate finance is important to all managers regardless of the industry they are in due to the fact that it deals with the strategic financial issues associated with achieving goals such as how the corporations should raise and manage its capital ‚ what investments the firm should make‚ what portion of profits should be returned to shareholders in the form of dividends‚ and whether it makes sense to make
Premium Supply and demand
FIN 515 Week 4 : Business Valuation and Stock Valuation - Exam Top of Form Exam 1. (TCO A) Which of the following statements is CORRECT? (Points : 10) It is generally more expensive to form a proprietorship than a corporation because‚ with a proprietorship‚ extensive legal documents are required. Corporations face fewer regulations than sole proprietorships. One disadvantage of operating a business as a sole proprietorship is that the firm is subject to double taxation
Premium Bond Sole proprietorship Cash flow
Employment Law Final Exam Radiah DiPiano Webster University HRMG/5700 Summer Term July 26‚ 2014 Author Note Certificate of Authorship: This paper was prepared by me for this specific course and is not a result of plagiarism or self-plagiarism. I have cited all sources from which I used data‚ ideas‚ or words either quoted or paraphrased. Employment Law Final Exam 1. There are two factors that would need to be considered by the Federal Court to determine the validity of Leroy’s lawsuit
Premium Discrimination Employment
per share of $3.00‚ and a price/cash flow ratio of 8.0. What is its P/E ratio? Cash Flow per Share = $3.00 Price / Cash Flow = 8.0 times Price / $3.00 = 8.0 x 3.00 = $24.00 Price = $24.00 P/E = $24.00 / $1.50 = 16 Solution: P/E = 16.0 times 3-5 ROE Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are $100 million and it has total assets of $50 million. What is its ROE? Net Income = $100millions x 3%= $30 million ROE= Net Income/assets= $30 millions/$50
Premium Financial ratio Financial ratios Balance sheet
FIN515 Course Project One Apple Inc. Apple Incorporated is a leading company in technology. Apple has created and reimagined technology to what we use today. Easy to use‚ educational and simple tools to enjoy the things we love- from watching movies to creating our own music- is what Apple has created in the technology being sold today. iMacs‚ iPods and iPhones are only a few of the lineup that Apple sells today in its stores. Apple is a Cinderella story that has continued to show consumers a
Premium Financial ratios Generally Accepted Accounting Principles Revenue