MAT 450 Assignment: Amortization Problems 1. Construct the amortization schedule for a $20000 debt that is to be amortized in 8 equal quarterly payments at an annual rate of 12 % compounded quarterly on the unpaid balance. First‚ determine the size of the payments‚ PMT = _________? |Payment # |size of payment |interest paid |balance paid |unpaid balance | | | | j = 0.03
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Valuation of! AirThread Connections J. Zhang Consulting: Mohammad Alkhamis‚ Marci McCall‚ Lindsay Ramirez‚ Sarah Spring‚ Mavis Yu ACC Review of AirThread Acquisition • Opportunity to acquire AirThread Connections • Base-Case Valuation of AirThread Connections: What our competitor’s will be willing to pay Value of AirThread Connections “as-is” • Upside Valuation of AirThread Connections: AirThread has strategic fit with current ACC operations Potential synergies for
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TIME VALUE OF MONEY SUMS 1. A finance company advertises that it will pay a lumpsum of Rs 8000 at the end of 6 yrs to investors who deposit annually Rs 1000 for 6 yrs. What is the rate implicit in this offer? 2. You want to take a trip to the moon which costs Rs 10‚00‚000-the cost is expected to remain unchanged in nominal terms. You can save annually Rs 50000 to fulfil this desire. How long will you have to wait if your savings earn an interest of 12 percent p.a.? 3. Suppose a firm borrows
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NEW ECONOMY TRANSPORT Principles of Corporate Finance 7th Edition Richard A. Brealey and Stewart C. Myers This is an equipment replacement decision. The objective is to minimize the present value of future costs. But there are a few real-life complications. • Some cash flows are stated in real terms‚ some in nominal terms. We will use a real discount rate for the real cash flows‚ a nominal rate for the nominal flows. The alternative is to convert all cash flows to real
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Adjusted Present Value Normal NPV calculation: NPV = −investment + CFN CF1 CF2 + +L+ 2 (1 + WACC) (1 + WACC) (1 + WACC) N where‚ in a simple situation: equity debt WACC = equity + debt (cos t of equity ) + equity + debt (cos t of debt )(1 − tax rate ) Using debt for financing has a tax advantage in that interest payments are tax deductible. This tax deductibility is a source of value for the firm. In the normal NPV calculation‚ this additional value is accounted
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Adjusted Present Value Adjusted present value is an investment appraisal technique similar to net present value method. However‚ instead of using weighted average cost of capital as the discount rate‚ ungeared cost of equity is used to discount the cash flows from a project and there is an adjustment for the tax shield provided by related debt capital. Formula Adjusted Present Value = PV of Cash Flows using Ungeared Cost of Equity + Present Value of Tax Shield Where PV stands for ’present value’
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Abstract It is well known that accounting a social science is evolving with the development of society and its progress and advancement‚ and as the community reacts to events and changes in various spheres of economic‚ political‚ environmental‚ re ligious‚ and with the global economic crisis‚ which still affect most sectors of the economy‚ all of these reasons with other of reasons‚ imposed on this social science that is evolving in terms of quality‚ style and methods applied in order
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Chapter 17: Valuation and Capital Budgeting for the Levered Firm 17.1 Honda and GM are competing to sell a fleet of 25 cars to Hertz. Hertz fully depreciates all of its rental cars over five years using the straight-line method. The firm expects the fleet of 25 cars to generate $100‚000 per year in earnings before taxes and depreciation for five years. Hertz is an all-equity firm in the 34-percent tax bracket. The required return on the firm’s unlevered equity is 10 percent‚ and the new fleet
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AIRTHREAD CASE Develop a projection of debt-free FCF for AirThread using the information provided in the case. Estimate a terminal value considering both the GG model and an exit EBITDA approach. Explain how you calculated g for the GGM. Also explain your final choice of terminal value. Develop a WACC for the acquisition. Assume an industry average D/E ratio. Do not use a private company discount as discussed on page 7. Calculate the value of Airthread operating assets based on the
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Case Study - Spyder Active Sports 1. How‚ if at all‚ does the value of Spyder depend upon its ownership structure? What are the (other) primary determinants of value? Current ownership structure CHB 37‚9 % Jacob 25‚4 % Shimokubo 25‚4 % Employees 11‚3 % SUM 100‚00 % New investors would influence the company policy and operation. If the change would have positive or negative effect is not known now. Other values of determination are: Advertisement‚ brand marketing‚ competition
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