A firm has identified good investment opportunities to invest $350 at an average 45 per cent rate of return. The firm has initial fund of $490. If the market rate is 20 per cent, find the net present value of the firm for the investment decision under Two-Period Perfect Certainty Model?
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- Please answer part C and D - As answered earlier the first two parts with ery clear solutions with clear steps and explainantion. Please do not answer if you are not confident.Which measures are known as rate-of-return analysis?One reason the Chinese buy a great deal of Canadian government debt is because: None of these statements is true. they know the risk involved is lower for Canadian government bonds than it is for any other government bond in the world. they have dollars left over from the sale of their goods to Canada and want to buy something dollar denominated. the rate of return for Canadian government bonds is higher than any other investment.
- Q50 The significance of the internal rate of return (IRR) is that it tells the firm whether it should invest in a capital project by comparing the IRR to the market rate of interest. Group of answer choices True FalseTrue/False AVC can fall even when MC is risingWhat is the amount and frequency of dividend payments on a bond that has a face value of $10,000 and a coupon rate of 8% per year, payable semiannually?
- If APC is constant, C and Yshould also be constant. True or FalseIn the case of a business with more than one product, a. it cannot use CVP analysis as such would be possible only if there is a single product. b. it can earn a higher-than-expected profit even if the total units sold was less than expectation. c. each of the products must use a separate CVP analysis. d. it can use CVP analysis only if the contribution margin percentages on each product are the same.Describe the Rate-of-Return Analysis?
- A private equity firm is guaranteed to receive 80% of the residual value of a leveraged buyout investment, with the remaining 20% owing to management. The initial investment is $500 million, and the deal is financed with 70% debt and 30% equity. The projected EBITDA multiple is 3.0. The equity component consists of: $120 million preference shares. $25 million private equity firm equity. $5 million management equity. At exit in 5 years, EBITDA is expected to be $400 million, the value of debt is $150 million and the value of preference shares is $300 million. Calculate (i) The payoff multiple (cash-on-cash return) for the private equity firm and for management, respectively (ii) The IRR (compound annual rate of return) of the PE firmThe net present value method does not incorporate the time value of money. O True O FalseDefine the term Net Present Worth in the present worth analysis?