PROJECT SUMMARY Name of the Business “Pitu de Goma” will be the name of the business. This name was conceptualized by the proponents due to the nature of industry or services that will be offered by the proposed business. Pito de Goma will focus on providing vulcanizing services and other tire problem to its target clienteles. Location of the Business The proposed business will be established at Barangay Tagongtong‚ Goa Camarines Sur near the Goa Municipal building. This location was considered
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knowing this announcement‚ Berkshire Hathaway’s Class A shares price went up and make them gained in market value $2.17 billion. In Berkshire and other investors’ point of view‚ After Berkshire takeover PacifiCorp‚ it might have a good development and future so that the stock price went up. Berkshire believed that PacifiCorp can have good earning returns in the future. The intrinsic value is more valuable than its cost so they are willing to pay $9.4 billion to acquire. Moreover‚ based on the
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Paper F9 Financial Management 1 (a) December 2007 Answers (i) Price/earnings ratio method valuation Earnings per share of Danoca Co = 40c Average sector price/earnings ratio = 10 Implied value of ordinary share of Danoca Co = 40 x 10 = $4·00 Number of ordinary shares = 5 million Value of Danoca Co = 4·00 x 5m = $20 million (ii) Dividend growth model Earnings per share of Danoca Co = 40c Proposed payout ratio = 60% Proposed dividend of Danoca Co is therefore = 40 x 0·6 = 24c
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A. $5‚684.22; reject B. $7‚264.95; accept C. $7‚264.95; reject D. $9‚616.93; accept E. $9‚616.93; reject AACSB: Analytic Bloom’s: Application Difficulty: Basic Learning Objective: 9‐1 Section: 9.1 Topic: Net present value 3. A firm evaluates all of its projects by applying the IRR rule. The required return for the following project is 21 percent. The IRR is _____ percent and the firm should ______ the project. A. 23.67 percent; reject
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Capital Budgeting Scenario Proposal A: New Factory A company wants to build a new factory for increased capacity. Using the net present value (NPV) method of capital budgeting‚ determine the proposal’s appropriateness and economic viability with the following information: • Building a new factory will increase capacity by 30%. • The current capacity is $10 million of sales with a 5% profit margin. • The factory costs $10 million to build. • The new capacity will meet the company’s needs for
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Making the Investment Decision Mr. Bill Sipple (HVS Capital) Post Session Assignment 1. What are the three main approaches to value and the pros/cons of each? The three main approaches to value are the income approach‚ which is widely used in the hotel valuation process‚ the sales comparison approach‚ and the cost approach. The income approach deals with either a Cap Rate or discounted cash flows. This approach is the preferred approach to valuation as it most closely reflects the economic
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forming a strong industrial base and providing the basic infrastructure for development in the country. From an investment in 5 enterprises of Rs. 29 crores in 1950-51. Investment in 242 Central PSUs has gone up to a staggering Rs. 2.04.054 crores‚ the net profit they made was just Rs. 13.725 crores -a return of 6.7 per cent only. The implicit assumption in the growth of PSU at the early stages was that public sector would perform the role of a pathfinder and create necessary infrastructural facilities
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strategies. As a rule of thumb‚ increasing the hurdle rate by 1% (for example‚ from 12% to 12.12%)‚ decreases the present value of project inflows by 1%. Because costs remained roughly fixed‚ these changes in the value of inflows translated into changes in the net present value of projects . Figure A shows the substantial effect of hurdle rates on the anticipated net present value of projects. If hurdle rates were to increase‚ Marriott ’s growth would be reduced as once profitable projects no longer
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02/2014 FOR THE SECOND SEMESTER QUESTION 1 (a) Determining value of company using the fair rate of return provided YEAR 2014 2015 2016 2017 (P0) (P1) (P2) (P3) (P4) Rand Rand Rand Rand Rand Expected dividend to be paid 2014 550 000 x 1‚10 2015 605 000 x 1‚15 2016 695 750 x 1‚20 2017 834 900 x 1‚25 605 000 695 750 834 900 1 043 625 Gordon’s dividend growth model 2018 and onward 43 484 375 0 Fair rate return Net value 605 000 695 750 834 900 44 528 000 0‚781 0‚610 0
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Harris Case Analysis Objective: Should Harris invest into the shrimp processing plant? Issues: 1. Will this processing plant have a value today that is greater than or equal to the cost today? -If the NPV of the plant is greater than zero‚ then we should move forward with the investment. NPV Analysis: Value> Cost Value: PV: Value right now PV= forecast of future cash returns (FCR) -We used FCR to determine how much cash we get back and can deem the plan a good investment if we can
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