### What discounted cash flow approach works best when

Friday, 12 September 2014

What discounted cash flow approach works best when projects require different amounts of initial cash investment?

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### Based upon the Gordon Growth Model

Friday, 12 September 2014

Based upon the Gordon Growth Model, calculate the anticipated market price of a stock that is paying dividends at a constant growth rate of 6.25%, with a recent dividend of $1.00, and a required return rate of 15%. (Show all work/calculations/formulas.) You would like to consider purchasing a stock that is selling for $90 and

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### A firm’s cost of capital is 12 percent.

Friday, 12 September 2014

A firm’s cost of capital is 12 percent. The firm has three investments to choose among; the cash inflows of each are as follows: Cash Inflows A B C YEAR 1 395 0 1241 YEAR 2 395 0 0 YEAR 3 395 0 0 YEAR 4 0 1749 0 Each investment requires a $1,000 cash

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### Table 1: Cash Flow Summary

Friday, 12 September 2014

Table 1: Cash Flow Summary Year Project A Project B 0 -30000 -30000 1 15000 12500 2 15000 10000 3 10000 15000 4 10000 15000 If Company XYZ has a WACC of 7% and the two projects are independent, which project would you accept based upon NPV rules? If Company XYZ has a WACC of

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### Discuss how excessive or exclusive reliance on other screening methods might lead to similar problems?

Friday, 12 September 2014

Part 1: Discuss how excessive or exclusive reliance on other screening methods might lead to similar problems? Name some key criteria that should be used in evaluating all new projects before they are added to the current portfolio. What is the effect of poor project-screening methods on a firm’s ability to manage its projects effectively?

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### I need some assistance analyzing

Friday, 12 September 2014

I need some assistance analyzing “Capital Budgeting”! What’s Capital Budgeting? How do companies use Capital Budgeting and why is Capital Budgeting so important? Response has to be 1,000-words/more (or at least one and a half pages long) with a minimum of 3 references in APA format! Thanks.

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### Role of Economic Value and Replacement Value

Friday, 12 September 2014

Role of Economic Value and Replacement Value Critically evaluate these comments. Please do not wander; concentrate on the issues described by the quotation. – “To me, economic value is the only justifiable basis for measuring plant assets for purposes of evaluating performance. By economic value, I mean the present value of expected future services. Still,

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### Dan is considering whether to issue coupon bearing bonds or zero coupon bonds.

Friday, 12 September 2014

Dan is considering whether to issue coupon bearing bonds or zero coupon bonds. The YTM on either bond issue will be 7.5%. The coupon bond would have a 6.5% percent coupon rate. The company’s tax rate is 35%. These are 20 year bonds. 2. How many of the coupon bonds must East Coast issue to

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### What are the annual cash flows of perpetuity that has a present value of $1,200, if the discount is 6.5%? a. $77.19

Friday, 12 September 2014

1. What are the annual cash flows of perpetuity that has a present value of $1,200, if the discount is 6.5%? a. $77.19 b. $81.25 c. $85.31 d. 89.58 e. 94.06 2. What is the present value of $75 at the end if year 1, $225 at the end of year 2, and $300 at

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### Show the cash flows for the following four bonds

Friday, 12 September 2014

a) Show the cash flows for the following four bonds, each of which has a par value of $1000 and pays interest annually. Bond………Coupon Rate (%)……….Number of Years to Maturity………..Price W……………………7…………………………………….5………………………………$884.20 X…………………….8…………………………………….7………………………………$948.90 Y…………………….9…………………………………….4………………………………$967.70 Z…………………….0…………………………………….10…………………………….$456.39 b) Calculate the yield to maturity for the four bonds

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