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Question#01 Amazon Inc. is a fast-growing company. Analysts project the followingfree cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 7% rate. Amazon’s cost of capital is WACC = 13%. Time 1 2 3 Free cash flow ($ millions) -$20 $30 $40   What is Amazon’s terminal, or horizon, value? (Hint: Find the value of all free cash flows beyondYear 3 discounted back to Year 3.) What is the current value of operations for Amazon? Suppose Amazon has $10 million in marketable securities, $100 million in debt, and 10 millionshares of stock. What is the price per share?

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Capital budgeting problems  and what king of you used for solving (NPV and IRR PROBLEMS ) A firm has the following investment alternative. Each one lasts a year Investment                       A                                    B                    C Cach inflow                       $1,150                         $560                   $600 Cash outflow                      $1000                         $500                   $500   The firm's cost capital 7 percent. A and B are mutually exclusive, and B and C are mutually exclusive. a. What is the net value of investment A? Investment B? investment C? B. W hat is the internal rate on investment A? investment B? INvestment C? c. Which invedstment(s) should the firm make? Why? d. If the firm had unlimited sources of funds, which investments should it make? Why? e. If there another alternative, investment D, with an internal rate of return of 6 percent, would that alter your anser to question (d)? why? f. If the firm's cost of…

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Intro IBM is planning to produce an expert system based on artificial intelligence and expects the following cash flows (in $ million) at the end of each year: Year Cash flow 0 -49 1 10 2 15 3 20 4 20 30 The company requires a return of 12% from this project. Part 1 What is the project's profitability index? 2+ decimals Submit

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Capital budgeting problems  and what king of you used for solving (NPV and IRR PROBLEMS ) A firm has the following investment alternative. Each one lasts a year Investment                       A                                    B                    C Cach inflow                       $1,150                         $560                   $600 Cash outflow                      $1000                         $500                   $500   The firm's cost capital 7 percent. A and B are mutually exclusive, and B and C are mutually exclusive. d. If the firm had unlimited sources of funds, which investments should it make? Why? e. If there another alternative, investment D, with an internal rate of return of 6 percent, would that alter your anser to question (d)? why? f. If the firm's cost of capital rose to 10 percent, what effect would that have on investment A's internal rate return?

ces Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects this risk class is 13 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively. Time: 1 2 3 5 Cash flow: -$290,000 $46,800 $65,000 $103,000 $103,000 $62,200 Use the MIRR decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.) MIRR % Should it be accepted or rejected? O rejected O accepted

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еВook Problem Walk-Through Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFS) during the next 3 years, after which FCF is expected to grow at a constant 5% rate. Dantzler's WACC is 13%. Year 2 FCF (S millions) $20 $30 $38 a. What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million b. What is the firm's market value today? Assume that Dantzler has zero nonoperating assets. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places. million c. Suppose Dantzler has $199.40 million of debt and 17 million shares of stock outstanding. What is…

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55 Ron Enterprises forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13.0%, and the FCFs are expected to continue growing at a 5.0% rate after Year 3.  What is the firm’s total corporate value, in millions?   Year 1 2 3 FCF -P15.0 P10.0 P40.0   Group of answer choices P348.48 P331.06 P386.13 P366.82 P314.51

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Q2: A $15,000 investment is to be made with anticipated annual returns as shown in the spreadsheet in the below Figure. If the investor's time value of money is 10% per year, what should be entered in cells B11, B12, and B13 to obtain present, annual, and future equivalent values for the investment? Also draw the cash flow of this problem. 1 2 3 36457 9 10 11 12 13 A EDY 0 1 lekm 2 3 4 SOTSPAL 5 6 7 F B Cash flow -$15,000 $2,000 $2,500 $3,000 $3,500 $4,000 $4,000 $4,000 $4,000