Assume that as a local government financial analyst you are asked to project the feasibility of a loan to a proposed public service venture for its start-up funding. The venture’s principals estimate that, at the end of 5 years, they will be able to pay back up to $800,000 from revenues accruing to the venture’s activities. Assuming that your organization’s current “average cost of capital” is 4.8% (the “discount rate”). Assuming monthly compounding, what is the maximum amount your government can commit to the venture for its start-up?

Your financial advisor from Bluerock recommends you to invest in one of the plan. You want to compare and verify which of the following is the best investment option. Investment Plan A: Deposit $125,000 at the beginning and obtain $175,318.97 after 5 years.Investment Plan B: Deposit $243,000 at the beginning and obtain $319,771.42 after 7 years.Investment Plan C: Deposit $314,000 at the beginning and obtain $530,496.39 after 9 years. 1. Compute interest rate for all 3 plans. Which investment plan provides you the highest rate? 2. Your advisor updated the investment plan information yesterday. While the interest rate did not change for all 3 plans, future values of each investment are 210382.76, 415702.85, 742694.95, respectively. What would be the investment period for each plan? 3. Your advisor thinks it would be a good investment if you make an investment portfolio using all 3 investment plans suggested. He recommends investing in all 3 plans at year 0 and reinvest the money to…

Company AAAs have option to invest in Company's BBBS newly constructed Condo. The WACC is 6%. The required investment is P6,000,000.00. The project will last for four years with estimated cash flow of P1,000,000.00 per year. -Compute for Discounted Cash Flow -How much is the Net Present Value  -If you are the manager of Company AAAS, will you consider investing in the project? Why?

Which investment project Alfa or Beta competing for funds is the best business decision (use the concepts of NPV and BEP):  Suppose that project Alfa is financed by investor’s own funds of 150 (expected return 15%) and by bank loan of 100 at the rate of 10%. And project Beta is financed by investor’s own funds of 100 (expected return 15%) and by bank loan of 150 at the rate of 10%.

Tennessee Tool Works (TTW) is considering investment in five independent projects, Any profitable combination of them is feasible. TTW has $50 million available to invest, and these funds are currently earning 7% interest annually from municipal bonds. If the funds available are limited to $50 million, what is TTW’s MARR that is implied by this particular situation?

A public university system wants to apply the concept of the WACC to developing its interest rate for analyzing capital projects. It has an endowment of $850 million which is earning 6.3% interest. It is paying 4.5% interest on $300 million in bonds. It believes that $120 million in general funds from the taxpayers should be assigned an interest rate of 13% What is the university’s cost of capital? Note that only new bonds or the interest on the endowment is available to fund capital projects.

As a finance teacher, show me How this question get -$7.30M as the answer.   MAAS, Inc. is evaluating an expansion project that requires a $380.0 million initial outlay. MAAS analysts assume the following annual after-tax net cash flows: -$80.0 million in year one, -$20.0 million in year two, and $22.0 million in year three. The cash flow is then expected to grow 5.0% annually forever. The project’s RRR is 9.0% and MAASs’ tax rate is 35%. What is the project’s NPV given the analysts assumptions?

XYZ, Co. is considering the purchase of a new building that will allow them to expand their market.  They plan to pay for the investment with a bank loan.  The interest payments on the loan will be $140,000 per year.  How will this be treated in the cash flows for capital budgeting?

Purple Cloud Inc. has $500,000 to invest. The company is trying to decide between two alternative uses of the funds.One alternative provides $65,000 at the end of each year for 10 years, and the other is to receive a single lump-sumpayment of $900,000 at the end of the 10 years. Which alternative should Purple Cloud select? Assume the interestrate is constant over the entire investment

Explain well with step by step type the answer.