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- Abdullah has OMR 5000 to invest in a small business venture. His partner has promised to pay him back OMR 8200 in five years. What is the return earned on this investment? Select one: a. None of these b. 10.39 % c. 12.40 % d. 10.75 % e. 14.50 % Gross working capital refer to the Select one: a. Firms liabilities in total current assets of the enterprise b. Firms investment in total fixed assets of the enterprise c. Firms investment in total Equity of the enterprise d. Firms investment in total current assets of the enterprise e. None of the optionsNakamichi Bancorp has made an investment in banking software at a cost of $1,430,438. Management expects productivity gains and cost savings over the next several years. If, as a result of this investment, the firm is expected to generate additional cash flows of $667,344, $725,331, $475,138, and $343,237 over the next four years, what is the investment’s payback period? (Round answer to 2 decimal places, e.g. 15.25.) Payback period is yearsFor example, if you a simple average of 5 year of either income or cash flow of:year 1 100year2 100year 3 100year 4 100year 5 100total 500average 100cap rate 0.2value 500 Now you go to the balance sheet as of the valuation date and have a cash balance of $500 and the industry working capital benchmark is $200, is it fair to add $300 to the value of the business? That is really the question. In practice, particularly matrimonial valuations, some practitioners would opine, if the owner sells the business they would realize $500 in value plus $300 in excess working capital for a total value of $800. Remember the value included the $300 ($100 each year), possibly not distributed cash flow/earnings, is that really value?
- ou are a banker to Livingstone Thompson Limited, a textile manufacturing company. Livingstone Thompson Ltd. is planning to establish a new factory overseas. Livingstone Thompson Ltd. have told you that the factory will run for six years and then be sold to a local entity. The Finance Department of Livingstone Thompson Ltd. has estimated the following yearly cash flows: Year Cash Flow (£) 0 -30,000,000 1 8,000,000 2 8,000,000 3 8,000,000 4 8,000,000 5 8,000,000 6 14,000,000 The Financial Manager of Livingstone Thompson Ltd. has decided that the company’s cost of capital of 15% is an appropriate hurdle rate for this project and informed you who will be providing the finance. Calculate the Internal Rate of Return (IRR)of this project. Record it step by step from beginning till the end result using the IRR formulas, but not formulas on excel.…You are a banker to Livingstone Thompson Limited, a textile manufacturing company. Livingstone Thompson Ltd. is planning to establish a new factory overseas. Livingstone Thompson Ltd. have told you that the factory will run for six years and then be sold to a local entity. The Finance Department of Livingstone Thompson Ltd. has estimated the following yearly cash flows: Year Cash Flow (£) 0 -30,000,000 1 8,000,000 2 8,000,000 3 8,000,000 4 8,000,000 5 8,000,000 6 14,000,000 The Financial Manager of Livingstone Thompson Ltd. has decided that the company’s cost of capital of 15% is an appropriate hurdle rate for this project and informed you who will be providing the finance. Calculate the Internal Rate of Return (IRR)of this project. Record it step by step from beginning till the end result using the IRR formulas, but not formulas on excel.You are a banker to Livingstone Thompson Limited, a textile manufacturing company. Livingstone Thompson Ltd. is planning to establish a new factory overseas. Livingstone Thompson Ltd. have told you that the factory will run for six years and then be sold to a local entity. The Finance Department of Livingstone Thompson Ltd. has estimated the following yearly cash flows: Year Cash Flow (£) 0 -30,000,000 1 8,000,000 2 8,000,000 3 8,000,000 4 8,000,000 5 8,000,000 6 14,000,000 The Financial Manager of Livingstone Thompson Ltd. has decided that the company’s cost of capital of 15% is an appropriate hurdle rate for this project and informed you who will be providing the finance. Calculate the Net Present Value (NPV) for this project. Calculate the Internal Rate of Return (IRR)of this project. Make a recommendation to your…
- You are a banker to Livingstone Thompson Limited, a textile manufacturing company. Livingstone Thompson Ltd. is planning to establish a new factory overseas. Livingstone Thompson Ltd. have told you that the factory will run for six years and then be sold to a local entity. The Finance Department of Livingstone Thompson Ltd. has estimated the following yearly cash flows: Year Cash Flow (£) 0 -30,000,000 1 8,000,000 2 8,000,000 3 8,000,000 4 8,000,000 5 8,000,000 6 14,000,000 The Financial Manager of Livingstone Thompson Ltd. has decided that the company’s cost of capital of 15% is an appropriate hurdle rate for this project and informed you who will be providing the finance. Calculate the Internal Rate of Return (IRR)of this project. Record it step by step using the formulasMorgan Stanley's wealth management unit offers to invest profits of $750,000 made by an artist on a world tour at 7% compounded semi-annually, locking the money for three years. What will the cash out be? The total interest paid on an investment is the difference between cash out, or A, and cash in, or P; that is I = A - P. What is the total interest earned by the investment?Suppose an investor gave you 150,000 to start a business.you gave investor 50 percent of your investment .Your revenue one was $479,600,your goods sold was $239,600 and your total operating expenses was $144,080.What ROI will your investor receive this year for his 50 percent ownership in the company?
- Suppose Jack, president of Heart Limited has hired you to advise on the firm’s cost of capital. (a) Based on the most recent financial statements, Heart’s total liabilities are $8 million. Total interest expense for the coming year will be about $1 million. Jack therefore reasons, “We owe $8 million, and we will pay $1 million interest. Therefore, our cost of debt is obviously $1 million/8 million = 12.5%.” Appraise Jack’s statement. (b) The company paid $1 million of dividends in the past year. Its market capitalization was $10 million. Based on his own analysis, Jack suggests that the company increases its use of equity financing, because “debt costs 12.5 percent, but equity only costs 10 percent; thus, equity is cheaper.” Appraise Jack’s statement. "Heart Limited has one bond in issue expiring in eight years, paying 0 coupon and has a face value of $1000. It is currently traded at $720, Beta =1.2, risk free rate is 2%, historic market risk premium is 5.5%. Assume the ratio of debt…Which of the following is a section of a cash flow statement? Select one: a.Fixed costs outflows b.Cash basis accounting systems c.Wage taxes d.EIN Question 22 Question text If you invest $1,525,000 in a business and earn a return of $775,000, what is your ROI? Select one: a.42% b.45% c.51% d.1.96% Question 23 Question text If Jacques invests $20,000 at 10% interest for 3 years, what will the future value of the money be? Select one: a.$26,620.00 b.$6620.00 c.$20,606.02 d.$26,000.00 Question 24 Question text Two common risks to cash flow stability are ________ and ________. Select one: a.credit squeeze; burn rate b.surplus inventory; pilferage c.burn rate; pilferage d.surplus inventory; credit squeeze Question 25 Question text A suggested allowance for contingencies and emergencies at start-up is _____ of estimated start-up costs. Select one: a.5 percent b.10 percent c.25 percent d.40 percentMr. Parvez invested Tk. 2850 in a startup. The business increased in value by 4% in the first year, decreased by 2% in the second year, and continued to increase by 7% from the third year onward. a) What was the average growth rate of the startup over the first 3 years? b) What will be the value of Mr. Parvez’s investment after 6 years?
