Severn plc is assessing a new project to expand its business. It will require an investment of £20m and will generate incremental cashflows of £1.75m for each of the first 5 years and then £2m each year in perpetuity. If the cost of capital is 8% what is the net present value for the project (to 1 decimal place)?

Q: Closing Closing Closing Market Price for Price for Date Index value AMZN BAC 2 2/1/2017 3 3/1/2017 4...

A: Given, While calculating  the monthly return we use the formula : Closing Price of Current month  Cl...

Q: If the opportunity cost rate is 8% and is compounded annually, what is the present value of Php 8,20...

A: Present value of future value is the equivalent value of money today considering the interest rate a...

Q: Bulldogs Inc. recently reported net income of P5,000,0000.  The firm has P40,000,000 total assets. N...

A: The increase in retained earnings is calculated as change in forecasted net income multiplied by the...

Q: need help with answering question B: A car loan offered by Bank One requires quarterly payments and ...

A: B: We will have to determine the EAR (effective annual rate) in each case and then select the option...

Q: he residual theory of dividends argues that dividends a. can only be distributed if there is income...

A: Solution:- Residual theory of dividends means the dividend is the residue left after meeting the cap...

Q: 1. What is the present worth of P 5 000 for 2 years at 12% compounded quarterly?

A: “Since you have asked multiple questions, we will solve the one question for you. If you want any sp...

Q: How much is the expected rate of return for Stock B? Use a whole number in

A: Expected return refers to the return earn by an investor on the amount invested during a period of t...

Q: What is the current price of a share of stock when the current dividend is P5, the growth rate is 5%...

A: Under dividend growth model, the current price of stock can be calculated as follows: P0=D1Ke-gWhere...

Q: Inc. currently fills mail orders from all over the country and receipts were received in its head of...

A: Answer -  Calculate the net reduction in A/R:Current A/R = $2,500,000. New A/R with 20% reduction:$2...

Q: Raglan Stores PLC has grown rapidly since its stock market flotation five years ago. Despite its rap...

A: Given that  Company's share =  80∈ million Outstanding Shares=200∈ million EPS (Earning per Share)=4...

Q: Which of the following is not a financial factor affecting the location decision? The availability o...

A: Location decision is one of the most important decisions with regard to the set up of the business a...

Q: Based on the information provided, the price/earnings multiple for National Co. is closest to

A: Expected EPS = EPS1 = P 5.70 Expected dividend = D1 = P 2.70 Growth rate (g) = 2.75% r = 8.35%

Q: 3. Time Value of Money Assume that ten years from now, you will need $10,000 and that your bank comp...

A: The concept of the time value of money states that money today has more value than the same amount i...

Q: ind the future values of the following ordinary annuities.

A: Future Value of Ordinary Annuity: It refers to the future worth of the annuity cash flows made at t...

Q: Bulldogs Inc. uses Additional Funds Needed as a plug item. If the company had forecast its additiona...

A: Because you have asked multiple questions, we will solve the first question as per Barlteby Policy. ...

Q: Calculate the future worth of 20 annual $4,000 deposits in a savings account that earns 8% compounde...

A: Future Value The future value is the amount that will be received at the end of a certain period. Th...

Q: 4. Best Flight Inc. is considering three mutually exclusive alternatives for implementing an automat...

A: To evaluate which alternative to be chosen, it is required to calculate the NPV of the different alt...

Q: Metallica Bearings, Incorporated, is a young start-up company. No dividends will be paid on the stoc...

A: Share price Share price is the current market price of the share. It is the price of the share at wh...

Q: A research and development project at your company has a 40% chance of producing a breakthrough wort...

A: Expected Value is determined when various values can be created or provided by a project to have a s...

Q: National Co. forecasts that its earnings per share will be P4.00 this year.  The company has 500,000...

A: Given: Particulars Amount Earnings per share 4 Out standing shares        500,000,000 Capit...

Q: The economic order quantity of Lancer Inc. is 1,000 unit. They sold their sole product for a selling...

A: EOQ refers to the point where the ordering and carrying costs are equal. Because an imbalance in ord...

Q: 4. Use MV = P(1 + RT) to find the maturity value (in $) of the loan. Principal Rate (%) Time Maturi...

A: The maturity value is calculated as sum of principal and interest earned

Q: A В D E F 1 A C D E 2 1 Market Capitalization, in millions 3 YUM ZTS ΑAPL Market (OEX) 4 3 31/01/18 ...

A: Stock prices are based on market factors due to which price level of stocks fluctuate on a regular b...

Q: A company is considering a 4-year project with the following cash flows: C0 =-$20,000 C1 =C2 =C3 =C...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: The final payment will be $______ (Round to the nearest cent.) Your bank is offering you an account ...

A: Interest rate is 20% Time period is 2 years   To Find: Equivelent interest rate for 6 months 1 yea...

Q: Assume that a bond will make payments every six months as shown on the following timeline (using six...

A: We are provided with a bond here that makes semi-annual payments. Semi-annual payments means twice e...

Q: You are a manager at Percolated​ Fiber, which is considering expanding its operations in synthetic f...

A: Here, Cost of Capital is 10% Cost of the Equipment is $19,000,000 Working Capital is $7,000,000 Part...

Q: Don Adams Breweries is considering an expansion project with an investment of P1,500,000. The equipm...

A: Investment = 1,500,000 Salvage value = 0 N = 5 years Depreciation per year = Investment / N = 1,500,...

Q: Your Corporation is investigating an investment in equipment that would have a useful life of 8 year...

A: Let the annual cash inflow = A n = 8 years r = 6% Initial investment (X) = $401414  

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...

A: Given 

Q: National Co. is a firm that is experiencing rapid growth. Lately, the firm paid a dividend of P5.90....

A: D0 = P 5.90 D1 = 5.90(1.19) = P 7.021 D2 = 5.90(1.19)^2 = P 8.35499 D3 = 5.90(1.19)^3 = P 9.94244 Af...

Q: You are asked to evaluate the following project for a corporation with profitable ongoing operations...

A: Net present value is the value of cash inflows earned from a project after deducting the value of th...

Q: t is the current price of a share of stock when the current dividend is P5, the growth rate is 5%, a...

A: Current price of stock can be found out from dividend ,growth rate and required rate by using consta...

Q: Calculate the annual effective interest rate using ERR method i

A:   ERR stands for economic rate of return means it compares the benefits from the project with its co...

Q: If the discount rate is 8 percent, then the projects NPV is $. (Round to the nearest dollar.)

A: Net present value (NPV) of an investment refers to the variance between the initial investment or pr...

Q: A new automotive "dry paint" separation process is environmentally friendly and is expected to save ...

A: Payback period refers to the amount of time taken or required by an investment to recover its initia...

Q: At what interest rate payable quarterly will payments of Php 500 at the beginning of each 3 months f...

A: The fee paid to an investor for the deposited fund is called interest. Generally interest is calcula...

Q: Use an 8-year analysis period and a 10% interest rate to determine which of the alternatives below s...

A: Net present value (NPV) of an alternative refers to the variance between the initial investment (fir...

Q: A B 1 Market Capitalization, in millions YUM ZTS ΑAPL Market (OEX) 31/01/18 28506.29 37389.63 369899...

A: Correlation is a statistical measure which measures the degree of response of two variables i.e. ana...

Q: Exercise 2 (Basic Present Value Concepts) Each of the following parts is independent. (Ignore income...

A: Note: Since you have specified 2 questions out of 3 multiple questions, we can solve only the first ...

Q: If the stated annual rate of interest compounded semi-annually is 12.5% then what is the equivalent ...

A: Interest rate (APR) = 12.5% Number of compounding per year (m) = 2  

Q: A contract calls for a payment of P1,200 at the beginning of each month for 12 months. At what rate ...

A: The compound interest is obtained by multiplying the initial the principle amount by one, subsequent...

Q: MM Proposition 2: McLaren Corp is financed entirely by common stock and has a beta of 1.0. The firm ...

A: Value of the unlevered firm When the firm has all equity in its capital structure and has no debt co...

Q: A growing business moved to a new building to service a bigger client pool. The building acquired th...

A: Cost of Building is ₱3,000,000 Interest Rate is 12% Time Period is 5 years Compounding Period is Mon...

Q: Dividend Growth and Stock Valuation The Brigapenski Co. has just paid a cash dividend of $2 per shar...

A: We need to use constant growth model to calculate the value of stock. The equation is  P0 =D1/(rs-g)...

Q: (Related to Checkpoint 4.2) (Capital structure analysis) The liabilities and owners' equity for Camp...

A: Borrowings are the loan which is taken by the individual to meet its financial requirements. The mor...

Q: How much is the temporary current assets needed during the fourth quarter? NEKO Inc. has a total fi...

A: Cash in 4th Q = 12,000 Account Receivables in 4th Q = 9,000 Inventories in 4th Q = 5,300

Q: Bingo Inc. sells on term 3/20, net 40. Total sale for the year are P1,200,000 on which 40% is cash s...

A: Total sales = P1,200,000 Cash sales = 40%   

Q: Company XYZ does not currently pay a dividend. However, their earnings have been growing at a very h...

A: Given:- First Dividend$ 6.9 per share  The dividend is then expected to grow at 20 % per year for 6...

Q: Red Company's comparative balance sheet shows the following: P10,000 increase in accounts receivable...

A: Net income = P 100000 Increase in accounts receivables = P 10000 Increase in inventories = P 10000 I...