AN/PVS-14

1. Calculate TRUST’s company after-tax WACC. The risk-free rate was 4.21%, the market risk premium was 6% and the company tax rate was 30%. The WACC should be rounded to four decimal places. After-tax WACC = rD (1-Tc) D/V + rE E/V rE = rf + βequity(rm – rf) rE = 0.0421 + 0.81(0.06) rE = 0.0907 E = number of outstanding shares x current share price E = 60 million x $3.43 E = $205.8 million D = $44 million bank loans + $1.2 million short-term hire purchase commitments D = $45.2 million

Thus, it will take about 14 years and 3 months. To find out how long it will take to triple your money, solve for x: (1 + 5%)x ’ (1 + 200%) ( x ( 22.5. Tripling will take 22.5 years, or 22 years and 6 months. 2.56 If the interest rate is 8% per annum, how

value. The present value is the dollar amount which, if invested at r percent compounded annually, would grow to an amount C after n years. PV formula: Let C denote a single lump sum cash flow to be received in n years; the present value is computed as follows: PV = C(1+r)-n t=0 n =(years) _______________________ ( C PV = C(1+r)-n Remark: The higher the interest rate, the lower the present value. Example: Suppose the interest rate is 8% compounded annually

After 3 years: FV3 = PV(1 + r)3 = $700 (1.10)3 = $931.70 After 2 years: FV2 = PV(1 + r)2 = $700 (1.10)2 = $847.00. In general, FVn = PV (1 + r)n Principles of Finance 5e, 9 The Time Value of Money © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website

1.The Dumonts are in the early years of the accumulation of wealth stage of the financial life cycle. During this longest stage of the life cycle, the Dumonts will establish their lifestyle and build a foundation for the two later stages. This phase is characterized by: 1. The Dumonts are in the early years of the accumulation of wealth stage of the financial life cycle. During this longest stage of the life cycle, the Dumonts will establish their lifestyle and build a foundation for the two later

Shapiro: Chapter 2: Capital-Budgeting Principles and Techniques QUESTIONS 1. a. What is the relationship between accounting income and economic profit? Answer: Accounting income is calculated by taking revenues and subtracting all cash and non-cash expenses (such as depreciation). Accounting income also often recognizes losses for tax purposes as well, even though the economic loss may have taken place at another time. Economic profit is the sum of the present values of all the cash flows

303,040)/85,680] = 4 + (17.600/191,760) = 3 + (59.560/85,680) = 4 + 0.9178 = 3 + .68347 = 4.09 years = 3.8 years Net Present Value (NPV) Press A Press B Cash Flow PVIF 14% PV Cash Flow PVIF 14% PV 1 $128,400.00 0.877 $112,631.58 1 $87,600.00 0.877 $76,842.11 2 $182,160.00 0.769 $140,166.20 2 $119,280.00 0.769 $91,782.09 3 $166,120.00 0.675 $112,126.00 3 $96,160.00 0.675

Brown, N. (2013). Forecast: Cost Of PV Panels To Drop To $0.36/Watt By 2017. Clean Technica. Retrieved on 3/14/2015 from http://cleantechnica.com/2013/06/19/forecast-cost-of-pv-panels-todrop-to-0-36watt-by-2017/ Byun, K. & Frey, C. (2012). The U.S. Economy in 2020: Recovery in uncertain times. U.S. Economy Colby, S. & Ortman, J. (2015). Projections of the Size and Composition of the U.S. Population: 2014 to 2060. Population Estimates and Projections. Retrieved on 3/14/2015 from http:

Bidirectional power flow from DG, is common phenomena now a day’s .For example, in a normal sunny day, the average PV generation would be high compared to cloudy day; and, the load requirement during day time in residential areas are quite low compared to early evening to night time. As, PV installations are carried out keeping the total load demand from a house , during the sunny day, the PV can easily exceed the load demand and generate excess power than required. This power is then back flowed to

of all PV of all cash flows i. NPV=PV inflows –Cost ii. The project should be accepted if the NPV is positive because such a project increases shareholder value. d. internal rate of return (IRR) the discount rate that forces a project’s NPV to equal zero. The project should be accepted if the IRR is greater than the cost of capital. e. modified internal rate of return (MIRR) discount rate which causes the PV of a project’s terminal value (TV) to equal PV of costs