the after-tax cost of debt was calculated to be asdfkl;safd. These are logical calculations‚ since the majority of Microsoft’s bonds do‚ in fact‚ have interest rates around 4%. Note‚ the interest on Microsoft’s bonds is incurred on a semi-annual basis and was calculated in this report on the same basis. Therefore‚ the semi-annual cost of debt would be half this value: 2%. Some other notes to consider in bond calculations are given below: Do we have any other notes to consider guys? Feel free to message
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Memorandum To: CEO‚ Ocean Carriers Re: Ocean Carriers Capital Budgeting Mary Linn‚ Vice President of Finance‚ has been approached by a potential customer with a proposed lease of a ship for a three-year period‚ beginning in early 2003. The terms are very attractive but we currently do not have a ship that meets this customer’s needs. Ms. Linn has asked Group 4 to research three proposed scenarios to determine whether or not commissioning a new capesize carrier for this customer will
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Cost of new equipment $200‚000 Expected life of equipment in years 5 years Disposal value in 5 years $40‚000 Life production - number of cans 5‚500‚000 Annual production or purchase needs 1‚100‚000 Number of workers needed 3 Annual hours to be worked per employee 2000 hours Earnings per hour for employees $12.00 Annual health benefits per employee $2‚500 Other annual benefits per employee-% of wages 18% Cost of raw materials
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BTEC Applied Science Unit 1: Efficiency Worksheet Name____________ efficiency = ( 100 %) 1 What is the efficiency of a motor that turns 100 J of electrical energy into 70 J of useful kinetic energy? Give your answer as a decimal. 2 An electric winch is used to lift a load of mass 2 kg a height of 1.5 m. It uses 50 J of energy when it does this. i) Calculate the amount of potential energy gained by the load using the formula: Ep = mgh where Ep is the potential energy
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McGilla Golf Company NPV analysis- McGilla Golf Company is thinking about undertaking a new project to add a line of golf clubs to add to their product line. Based on market research their net income will increase by 3‚240‚000 per year for seven years. When analyzing their required net working capital‚ capital spending and operating cash flow over these 7 years‚ their NPV is positive at $6‚480‚747.29. Based on these projections adding the line of gold clubs is an acceptable project for the company
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ASSIGNMENT 1: Strategic Corporate Finance Type of Assessment: Case Study: 2500 words (equivalent) Submission deadline: Upload to Moodle before 14:00 noon Friday 22nd March 2013. Weighting: 50% of module mark Uploading to Moodle * Attach the feedback sheet and marking grid to the front of your assignment * Upload your spreadhseet Learning outcomes 1. Analyse different capital budgeting techniques 2. Evaluate the information derived from different capital budgeting techniques
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costs. Thus to make shareholders happy‚ a firm must invest in projects with positive NPVs. We shall start this essay with an explanation of the NPV‚ then compare this method with other investment appraisal methods and finally try to define‚ based on the works of Tony Davies‚ Brian Pain‚ and Brealey/Myers/Allen‚ which method works best in order to define a good investments. So what is the Net Present Value? The NPV is today’s value of the difference between cash inflows and outflows projected at future
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Porsche vs. Toyota (2011‚ in millions) Net Profit Margin Asset Turnover ROA Leverage Ratio ROE Porsche 13.36% 0.51 6.81% 3.09 21.05% Toyota 1.98% 0.61 1.21% 2.77 3.35% Dupont Analysis: Porsche vs. Toyota Porsche strategy: From the chart above‚ we can see that Porsche has a high gross margin (37.6%) and operating expense to sale ratio (15%). It also has relative low asset turnover ratio (0.51). Hence
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rest of our life. In this case‚ NPV is the most appropriate answer out of two or three most widely used techniques in capital decision making. While doing so we also should keep in mind two major features of NPV: 1) in monetary terms‚ NPV is the difference between today’s market value of the investment and its original cost. 2) a financial manager should always act on behalf of the interests of shareholders through distinguishing and picking up projects with positive NPV‚ since it’s very clear that
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Initial Investment The desired item is jewelry The cost in 12 years will be about $6000. The average interest rate is 5%. The Present value formula is P =A (1+r)-n where P is the present value that will amount to A dollars in n years at interest rate r compounded annually. Note that the quantity raised to a power has the negative exponent on –n. According to the rules of exponents‚ this means that once the negative is put into effect‚ the base quantity will change position by dropping down
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