Sebastian Vincent and his wife, Elyse have they decided to purchase $2500 worth of utility stocks starting 2 years from now. The married couple is expecting their income to increase so they have decided to increase their purchases by $250 per year for the next 10 years. What would be the present worth, future worth, and annual worth of their utility stocks if they yield a uniform dividend of 10% throughout the investment period and the price/share remains constant?
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- An electric cooperative is considering the use of a conicrete electric pole in the expansion of its power distribution lines A concrete pole costs 18.0o0 each and will last 20 years The company is presently using creosoted wooden poles which cost 12.000 per pole and will last 10 years. If money is worth 12 percent, which pole shoulcd be used? Assurne annual taxes amount to1 percerit of first cost and zero salvage value in both cases a) Use rate of return method b) if the maximum retum on investment is 20% what is the justifiable arnount that can be paid for concrete electric pole?Pak China Railroad reported net income of $770 millionafter interest expenses of $320 million in a recentfinancial year. (The corporate tax rate was 36%.) It reporteddepreciation of $960 million in that year, and capitalspending was $1.2 billion. The firm also had $4 billionin debt outstanding on the books, was rated AA (carryinga yield to maturity of 8%), and was trading at par(up from $3.8 billion at the end of the previous year).The beta of the stock is 1.05, and there were 200 millionshares outstanding (trading at $60 per share), witha book value of $5 billion. Union Pacific paid 40% of itsearnings as dividends and working capital requirementsare negligible. (The Treasury bond rate is 7%.)is considering a new 3- year - long project that would involve using specialized scanning software to scansubmitted screenshots in low resolution and convert them into high resolution text documents that there's currently astrong market for. Course Hero requires a 17 percent annual return on this uncertain project, high enough tocompensate for the underlying uncertainty of future cash inflows. A decision to accept the project would be followed byan immediate investment of $5.8 million into purchasing the software. At the end of the project Course Hero is hoping tobe able to find a different company in similar line of business that would be willing to pay $449, 400 for the software andits future ownership.other similar software, its value will be dropping over its economic life according to the 3- yearMACRS depreciation schedule. (See this MACRS Table) Course Hero pays taxes on its annual income and other taxablecash flows according to a 32 % tax rate. Course Hero estimates $5, 136, 000…
- Abbott wants to increase their marketing for Pedialyte leading up to St. Patrick's Day this year. They launch a Superbowl ad on 2/13/2022, costing them $5,000,000, and they launch a secondary campaign in early March (3/6) costing $800,000. They expect to see sales starting at $500,000 on 2/20, increasing by 20% every week for 6 weeks. Assuming a MARR of 12%, what is the present value of this project at the start of the campaign if they stop attributing sales to this on 4/3/2022?O. $602,449O. $597437O. $563,446O. $321,998Abbott wants to increase their marketing for Pedialyte leading up to St. Patrick's Day this year. They launch a Superbowl ad on 2/13/2022, costing them $5,000,000, and they launch a secondary campaign in early March (3/6) costing $800,000. They expect to see sales starting at $500,000 on 2/20, increasing by 20% every week for 6 weeks. Assuming a MARR of 12%, what is the present value of this project at the start of the campaign if they stop attributing sales to this on 4/3/2022? Group of answer choices $563,446 $602,449 $321,998 $597,437Two year ago, you acquired a 10 year $1000 par value bond at 12% YTM. Recently you sold this bond at 8% YTM. Using semi-annual compounding, compute the annualised horizon return for this investment
- Alset Inc. is considering manufacturing and selling high-end electric automobiles for the next four years. It hired two research and development teams. Team #1: This team believes that it would be realistic to sell 16 cars for $295,000 after-tax profit per car (i.e., operating cash flow per car). The R&D team also estimates $14.1 million in required initial investment. A 13 percent annual rate of return would be appropriate for discounting all future cash flows. a. Calculate the Net Present Value of this project according to Team #1. (Let's call it the "base-case Net Present Value".) (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) b. Team #2: This team has done a more sophisticated analysis, which may potentially greatly affect the project's revised Net Present Value! The project goes as planned for four years…Compute for the Annual Worth of MEA1 and explain. Compute using the Annual Worth formula and WITHOUT using Excel sheets. Thank you. MARR = 12%m. A machine is under consideration for investment. Thecost of the machine is Php 25,000. Each year it operates,the machine generates a saving of Php 15,000. Given aneffective annual interest rate of 18%, what is thediscounted payback period, in years, on the investmentin the machine? include a non-excel cash flow
- Analyze a CSR capital investment proposal for Ganon Inc. Ganon Inc. is evaluating a proposal to replace its HID (high intensity discharge) lighting with LED (light emitting diode) lighting throughout its warehouse. LED lighting consumes less power and lasts longer than HID lighting for similar performance. The following information was developed: Line Item Description Value HID watt hour consumption per fixture 500 watts per hr. LED watt hour consumption per fixture 300 watts per hr. Number of fixtures 800 Lifetime investment cost (in present value terms) to replace each HID fixture with LED $300 Operating hours per day 10 Operating days per year 300 Metered utility rate per kilowatt-hour (kwh)* $0.12 *Note: A kilowatt-hour is equal to 1,000 watts per hour. a. Determine the investment cost for replacing the 800 fixtures.fill in the blank 1 of 1$ b. Determine the annual utility cost savings from employing the new energy solution.fill in the blank 1 of 1$ c. Should…Triple J Construction Firm had put up for sale of some of their heavy equipmentfor construction works. There were two interested buyers submitting their respective bidsfor the heavy equipment. The bids are as follows:Buyer A offers P10,000,000 payable 20% down payment, the balance payable P1,000,000annually for 8 years.Buyer B offers P9,000,000 payable P2,000,000 down payment, the balance payableP500,000 semi-annually for 7 years.How much is the difference between the two bids if money is worth 10% effective?ANSWER: P347,733.29A company would like to invest on a project. The rate the company uses to justify their investments, i.e. the MARR is 25% per year (compounded yearly). Their estimations about the projects are as follows: Initial Cost: ($300,000)The Study Period: 15 yearsSalvage (Market) Value of the Project: 20% of the initial cost 1-) What is the capital recovery cost, CR? 2-) Operating costs in the first year are estimated to be ($7,500) and these operating costs are estimated to increase by 5% per year. Construct cash flow table and determine the minimum amount of annual revenue ($ per year?) that makes this investment an attractive option for the company? (i.e. what is Equivalent UNIFORM (Annual) Cost, EU(A)C?) 3-) Benefits in in the first year are estimated to be $30,000 and these benefits are estimated to increase by 13% per year. Construct cash flow table and determine the net present value/worth of the project, NPW. 4-) What is the simple payback period? 5-) Determine IRR of…