The “Logistics and Transportation Star” Ltd is considering its alternative investments comprising its investment opportunity set (Investment A - Investment Z). The investments with their relevant cash flows are as follows: Year Investment A Investment B Investment C Investment D Investment E Investment Ζ 0 -600,000,00 € -480,000.00 € -360,000.00 € -240,000.00 € -720,000.00 € -840,000.00 € 1 168,000,00 € 120,000.00 € 180,000.00 € 48,000.00 € 240,000.00 € 300,000.00 € 2 168,000,00 € 120,000.00 € 84,000.00 € 48,000.00 € 240,000.00 € 240,000.00 € 3 180,000,00 € 180,000.00 € 84,000.00 € 84,000.00 € 240,000.00 € 240,000.00 € 4 180,000,00 € 180,000.00 € 84,000.00 € 84,000.00 € 192,000.00 € 168,000.00 € 5 190,000,00 € 190,000.00 € 94,000.00 € 94,000.00 € 190,000.00 € 178,000.00 € You are asked to evaluate the above investments and answer the following questions assuming that the firm’s cost of capital is 10%. a. Rank the investments from the best to the worst according to their Net Present Value (NPV) and Internal Rate of Return (IRR). Demonstrate your calculations  b. If Logistics and Transportation Star can invest up to 1,440,000€, which are the investments that it should prefer? Explain your recommendations.

Q: When computing an interest or growth rate, the rate will increase the smaller the future value,…

A: The statement is False.

Q: The National Lottery decided to make 2020 a year of CHARITIES. They gave a big donation of R42 345…

A: Given, The donation amount is R 42,345,335

Q: A manufacturing company is considering two types of industrial projects that require the same level…

A: Incremental IRR:  The incremental IRR, also well-known as the incremental internal rate of return,…

Q: You are the finance manager for Olympia Industries. The company plans to purchase $1,000,000 in new…

A: Future Value = $1,000,000 Time Period = 5 Years Interest Rate = 6% Compounded semi-annual  Inflation…

Q: If the assumption that companies pay no tax in Modigliani & Miller Proposition is relaxed, while the…

A: Modigliani & Miller Propositions are an economic theory that state that the value of the firm is…

Q: Consider the following two statements concerning risk analysis: 1. Sensitivity analysis provides…

A: Risk analysis is defined as the identification as well as analysis process of the potential issues,…

Q: What is the annual equivalent cost of purchasing a lift truck that has an initial cost of $85,000,…

A: Annual Equivalent Cost (EAC) refers to the value which shows the estimated annual expense for…

Q: Finance what were 2008 financial crisis impacts on risk management, what can we learn from financial…

A: The 2008 financial crisis was one of the worst financial crisis that has occurred in history. The…

Q: ond Z is an 8% annual coupon bond maturing in 5 years with a face value of maturities is 10%. What…

A: The following information has been provided in the question: Coupon rate =5% Face value =$1000…

Q: The New York Soccer Association would like to accumulate R10,000 by the end of 4 years from now to…

A: Solution:- When an amount is invested somewhere, it earns interest on it. The amount deposited is…

Q: Why investors are willing to invest in high-tech firms instead of conventional financial sources?

A: Conventional financing is a scheme related to financing of home that is offered by financial…

Q: Suppose that you want to use the 10-year historical average return on the Index to forecast the…

A: 95% confidence interval can be calculated using the below formula: Standard error is: Standard…

Q: what formula did you use to calculate PVIFA?

A: The acronym PVIFA stands for the present value interest factor. The present value interest factor is…

Q: Weston Corporation just paid a dividend of $2.5 a share (i.e., D0 = $2.5). The dividend is expected…

A: The question is related to Dividend Growth model. D0 = $2.5 D1 = D0 × (1 + g) and so on  D0 = Just…

Q: uppose you are 40 years old and plan to retire in exactly 20 years. 21 years from now you will need…

A: The concept of time value of money will have to be used here. As per the concept of time value of…

Q: What is the project's PI

A: Profitability Index: Also known as the value investment ratio and measure the attractiveness of the…

Q: Anna and Bob have decided to buy an apartment. The cost of the apartment is RM150,000. They can get…

A: Monthly mortgage payment will depend on the amount of loan, interest rate and the payment period.…

Q: Colby's gross income was $93,000 last year. If he had $1646.92 withheld for federal income tax from…

A: The gross income of a salaried person is the cost to the company. First, all the exemptions and…

Q: he interest factors for discrete compounding when /=8% per year. I le rides per year required to…

A: Break even number of trips are the trips which would require all cost of including all other cost…

Q: Lomack Company's bonds have a 8-year maturity, a 9% coupon, paid semiannually, and a par value of…

A: Given, Par value of bond is $1000 Market rate is 4% Coupon rate is 9%

Q: Stock 1 Stock 2 Realized Realized Year End Return Return 2004 20.1% -14.6% 2005 72.7% 4.3% 2006…

A: Here, Year Stock 1 Return Stock 2 Return 2004 20.10% -14.60% 2005 72.70% 4.30% 2006 -25.70%…

Q: Natasha inherits 53,213 on Jan 1 and invests this money in a savings account for 3 years. There are…

A: Honor code: Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: 16. The stock is currently trading at $32 per share. Consider a put option on this stock with a…

A: The market price of share = $32 The strike price of a share = $30

Q: A rich aunt has promised you $2,000 one year from today. addition, each year after that, she has…

A: Present Value of growth annuity can be calculated as: = First Payment/ (Discount rate - growth…

Q: The company LLC Corp needs additional funds to expand its production capacities. Therefore it issues…

A: Face Value  €   10,00,00,000.00 Price of Bond 99.87% Time Period of Bond 5 Coupon Payment…

Q: Answer true or false and explanation to why. Restructuring the liabilities might positively…

A: Debt and liability restructuring is the process of settling all owing and unpaid liabilities by…

Q: Which of the following statements about managers' compensation is true? a. High salaries motivate…

A: Granting Stock to managers or key employees triggers as a motivation for the employees as they…

Q: uppose you buy Google stock at $ 600 and sell it at $ 720. While you held the stock, Google…

A: Return is an important concept in finance. Return means profit that an investor has made on its…

Q: hat effective annual rate of return (EAR) would Rayne need to earn if she deposits R1,000 per month…

A: Solution:- When an equal amount is paid each period at end of period, it is called ordinary annuity.…

Q: what is the equivalent annual cost of the maintenance?

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: 8. Assume that the CAPM is a good description of stock price returns. The market expected return is…

A: Solution:- Expected alpha of a stock means excess return of a stock over the market.

Q: You purchase a washing machine and dryer for P750. You pay 20% down and agree to repay the balance…

A: The time value of money concept is applied in the case of the calculation of interest. Compounding…

Q: As a junior investment manager, your boss instructs you to help a client to invest $100,000 for the…

A: We will first calculate the expected return of the portfolio by taking the weight proportionately…

Q: You are the CEO of a company that has been the subject of a hostile takeover. Thibeaux Piques has…

A: Share buy back- Under this type of transaction, a company buy back its own shares from the share…

Q: Consider the following realized annual returns for the Index HG200: Year End Index Realized Return…

A: Here, To Find: Part a. Average Annual Return =? Part b. Standard Deviation =?

Q: The company SunInc wants to launch a new product and therefore needs to raise new financing. SunInc…

A: Solution:- Yield to maturity is the rate of return earned by the bond holder, if he holds the bond…

Q: Company BSM has total assets with a market value of $100 million financed by debt and equity. The…

A: Zero coupon bonds: This bond does not pay any coupon but pays only maturity value in the nth year.

Q: An annual perpetuity has a constant cash flow of $1000.  If the interest rate is 7% compounded…

A: Given, Annual cash flow: $1,000Interest rate: 7%Present value of perpetuity=Annual cash…

Q: Which of the following point is not consistent with the decision of undertaking a merger and…

A: Merger: It is an agreement in which one or more companies will convert into single company. There…

Q: Currently, inventors in the stock market expect the price of the XYZ corporation's stock next year…

A: The efficient market hypothesis states that the asset prices reflect all the information present in…

Q: Estimate the expected return on each stock assuming that the interest rate is 2%, the expected risk…

A: Fama French 3 Factor Model: It refers to an asset pricing model that extends on the capital asset…

Q: Consider the previous question with the same yield curve. Now suppose I tell you tha market…

A: Liquidity preference theory states that investor demands a higher rate of return over longer period…

Q: According to the Capital Asset Pricing Model (CAPM), an asset with negative beta:   a. Cannot…

A: Capital Asset Pricing Model (CAPM): CAPM is the method of calculating the expected return on…

Q: The Southern Guru Copper Company operates a large mine in a South American country. A legislator in…

A: Internal rate of return is the discount rate at which the present value of the future cash flow and…

Q: Please solve fast max 15-20 minutes and no reject thank u  Gilian has 850,000 shares of common…

A: In calculating the weighted average cost of capital we need to know weight of each component of cost…

Q: An equipment costs P8,000 has an economic life of 8 years and salvage value of P400 at the end of 8…

A: Equipment Costs = P8,000 Time Period = 8 Years Salvage Value = P400 1st Year Depreciation Amount =…

Q: If the stock price is 44, the exercise price is 40, the put price is 1.54, and the Black- Scholes…

A: The question is related to Balck Scholes model. The Black Scholes Merton option pricing model values…

Q: Your car loan requires payments of $1,000 per month over the next18 months and payments of $2,000…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: Please solve fast max 15-20 minutes and no reject thank u If Po is worth $1,200 then at what market…

A: The stock market refers to various exchanges and other places where you can buy and sell the stock…

Q: 4-49. Consider the accompanying cash-flow diagram. (See Figure P4-49.) a. If P = $1,000, A = $200,…

A: A.  Investment = 1000 A = 200 Interest = 12% N = ?   B.  Investment = 1000 A = 200 Interest = ? N =…