(Mutually exclusive projects and NPV)
You have been assigned the task of evaluating two mutually exclusive projects with the following projected cash flows:
Year

Project A
Cash Flow

Project B
Cash Flow


0

$(100,000)

$(100,000)


1

33,000

0


2

33,000

0


3

33,000

0


4

33,000

0


5

33,000

220,000

If the appropriate discount rate on these projects is 10 percent, which would be chosen and why?
The NPV of Project A is $ (Round to the nearest cent.)
The NPV of Project B is $ (Round to the nearest cent.)
Which project would be chosen and why?
(Select the best choice below.)
Q: Which of the following is the most correct answer for the beta of a portfolio of 35 stocks where the...
A: The beta of the portfolio will be between 0.84 and 1.51 is the most correct answer for the beta of a...
Q: New parents wish to save for their newborn's education and wish to have $46,000 at the end of 17 yea...
A: Computation of yearly payment:Hence, the yearly payment is $1,682.02.
Q: Campbell Supper Co. paid a $0.672 dividend per share in 2013, which grew to $0.82 in 2016. This grow...
A: Dividend per Share in 2013 (pv) = $0.672Dividend per Share in 2016 (fv) = $0.82Time Period (nper) = ...
Q: You are a management trainee in one of the Manufacturing companies based in Johor, Malaysia. The com...
A: The future cash flows and the discount rate are the two factors on which the value of the firm relie...
Q: a firm has an asset base with a market value of 5.3 million. ITs debt is worth 2.5 million. if 0.2 m...
A: Weighted average cost of capital can be used to estimate the rate which should be provided to invest...
Q: An investor has a portfolio of two securities, a stock with a beta of 1.24 and a riskfree asset. Th...
A: Suppose the weight of the stock in the portfolio be x, then the weight of the risk free asset in the...
Q: UT Purded d66 3 573 3)reced as Cr Suppose that you decide to buy a car for $25,767, including taxes ...
A: Not:No intermediate rounding is done, only the answer is rounded to nearest dollar.a)The cost of buy...
Q: Smooth Sailing Warehouse wants to issue 15year, zero coupon bonds that yield 7.50% with semiannual...
A: Calculate the bond price as follows:
Q: Ba short position in a fulures coedracd Csold a forward coetract D. purchased a forwand contracd E. ...
A: Option is a derivative instrument which gives the buyer the right to buy or sell an asset at a prede...
Q: Dexter International is expected to pay a dividend next year of $2.10 per share. Dexter has a beta o...
A: Calculation of dividend yield:Answer:Dividend yield is 5.0%Meaning:Dividend yield is shown as a perc...
Q: What is calculation of before Tax (Equity) Cash Flow? Please provide example.
A: The cash flow, which is generated by an investment after deducting all payments of all expenses from...
Q: Please solve #2 and #6 A corporation creates a sinking fund in order to have $860,000 to replace s...
A: Part 2 to 6:Excel Spreadsheet:
Q: Explain the disadvantages and dangers of Home Equity Loans.
A: The disadvantages of home equity loans:Higher rate of interest: The interest rates are typically hig...
Q: Compute the expected return given these three economic states, their likelihoods, and the potential ...
A: Calculation of Expected Return:The expected return is 1.20%.Excel Spreadsheet:
Q: Need help with fuel savings for both car and truck
A: Calculation of number of gallons consumed for one year before upgradation:
Q: Which of the following countries tend to have the lowest mutual fund fees? countries with high inves...
A: Mutual Fund Fees: It is the charges which are paid by an investor to the investment manager for the ...
Q: Venus, Inc. has an issue of 9% preferred stock outstanding which pays annual dividends. If this iss...
A: Calculate the required return as follows:
Q: What would the average tax rate for a person who paid taxes of $6,435 on taxable income of $40,780?
A: Calculation of average tax rate:Answer: Average tax rate is 15.78%Meaning: Average tax rate is calcu...
Q: Wheels, Inc. is a manufacturer of bicycles sold through retail bicycle shops in the southeastern Uni...
A: Alternative 1: Required Sales = XNumber of Salespersons required = 10Fixed Salary of Each Salesperso...
Q: A manager believes his firm will earn a return of 16.35 percent next year. His firm has a beta of 1....
A: Calculation of Required Return:The required return is 14.68%.
Q: How much will I need to deposit into an account to have $6,500,000 in 10 years earning 5 % compounde...
A: The principal amount (initial amount of deposit) is computed using the given formula:
Q: (Future value) Sales of a new finance book were 15,000 copies this year and were expected to increas...
A: Sales this year = S0 = 15,000 copiesAnnual growth rate in sales = g = 20%
Q: What are the three primary methods used to determine interest charges on an unpaid credit balance? ...
A: The three primary methods used to determine interest charges on an unpaid credit balance is,Average ...
Q: Question 1 Atlantic Corporation is the largest logging company in the north eastern part of the Unit...
A: The value of the stock is the trading price of the stock at which the stock is purchased in the mark...
Q: Hello, It is a three part question. However, I would like to know how the amount of 122, 265, was ca...
A: 3.Calculate the net present value as follows:
Q: 9. A passbook savings account has a rate of 6%. Find the effective annual yie if the interest is com...
A: I am solving the first question, that is Q  9.
Q: I am currently working on some practice problems for my finance class and am unsure how to set up an...
A: As per the rule, I will do the first three parts. Since 1a is done will do 1b, 2 a and b.1b) Standar...
Q: Ang Electronics, Inc., has developed a new DVDR. If the DVDR is successful, the present value of the...
A: NPV refers to the net present value of a project or an investment. In the given question, we need to...
Q: The equity versus debt decision relies on a large number of factors such as the existing capital str...
A: As a rule, the superlative capital structure for a business is a capital structure which decreases t...
Q: ERC is the largest logging company in the United States. Their logging reserves are being depleted ...
A: The amount received by shareholders on periodic basis against providing equity to company is known a...
Q: Some characteristics of the determinants of nominal interest rates are listed as follows. Identify t...
A: The shortterm riskless security rate during the period where inflation is expected to zero real ri...
Q: Topic: Payout Policy What is the advantage(s) of dividends against retained earnings?
A: Dividend is the share which is given to the shareholders when from the company's profit. Dividend ca...
Q: Wildcat engineering decides to take a $10,000 interest only lona. The loan is to be paid montly over...
A: Interest only loan can be described as the loan on which borrower only pays the interest payments du...
Q: Microhard has issued a bond with the following characteristics: Par: $1,000Time to maturity: 5 years...
A: Calculate the prices of the bond as follows:MSExcel > Formulas > Financials > PV
Q: Amy is single with a salary of $50,000. She has been offered a new position that will raise her sala...
A: Existing Salary of Amy = $50,000New Salary of Amy = $53,000Raise in Salary = $53,000  $50,000 = $3,...
Q: In a strongform efficient market, accounting announcements: will impact stock price only if it ...
A: Stock price can be defined as the monetary value of a stock at which the stock is traded in the mark...
Q: Need help figuring this out and setting up in Excel with formulas.
A: Payback period is the time when the cumulative cash flow turns out to be zero. Discounted payback pe...
Q: The next dividend payment by Grenier, Inc., will be $1.72 per share. The dividends are anticipated t...
A: The interest rate that an investor expects from the investment made is known as required rate of ret...
Q: Q1. Consider an allequity firm that is contemplating going into debt. The market value of equity is...
A: a)Calculation of EPS, ROA and ROE before debt issue:Excel Workings:
Q: What is Internal Rate of Return  Variable Cash Flows with Reversion? Please provide examples.
A: The internal rate of return is the one of the discounted techniques of capital budgeting which is us...
Q: You are a management trainee in one of the Manufacturing companies based in Johor, Malaysia. The com...
A: Value of the firm:Value of the firm is measured by using sum of value of firm’s equity and its debt....
Q: Optimal corporation wants to expand their manufacturing facilities. They have two choices, first to ...
A: 1. The net present value of option 1:Computation of net present value:Hence, the net present value i...
Q: 12. You are considering the purchase of a tract of timber land today as an investment. Last years ti...
A: Calculate the current price of the land as follows:
Q: Please show all equations and work as needed. Make the correct answer clear. If possible, please typ...
A: Calculation of WACC of firm after leverage (effective aftertax):Answer:WACC after leverage is 15.95...
Q: Critically discuss the effect of increasing the amount paid upfront when corporations make capital p...
A: The company do not get charged a lower interest rate because of making huge down payment. Upfront pa...
Q: At time 0 you had $2500 in the bank and 21 years later you had $15650. Calculate the effective annu...
A: Effective interest rate can be described as the interest rate gained or paid in actual on a project....
Q: If you invest $900 in a bank in which it will earn 8 percent compounded quarterly, how much will it ...
A: PV = $ 900; r = 8% compounded quarterly; m = frequency of compounding = 4 (as there are four quarter...
Q: As requested, I include full question. only need answer part d) https://www.bartleby.com/questionsa...
A: Hence, WACC before debt is 10%, and is determined by multiplying cost of equity capital with weight ...
Q: Your company is currently considering two investment projects. Each project requires an upfront expe...
A: 1.a)Computation of payback period for project A and project B:Hence, the payback period of project A...
Q: Purchased a home for $110,000. Today home is worth $150,000. Remaining mortgage balance is $50,000. ...
A: Market value is the value at which one person can sell the asset in the given market.