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Nonamiya [84]
3 years ago
15

CAPITAL BUDGETING CRITERIA Your division is considering two projects. It’s WACC is 10%, and the projects’ after-tax cash flows (

in millions of dollars) would be as follows; ______ 0__1__2___3__4___Pro A -$30 $5 $10 $15 $20Pro B -$30 $20 $10 $8 $6a) Calculate the projects’ NPVs, IRRs, MIRRs, regular paybacks and discounted paybacks.b) If the two projects are independent, which project(s) should be chosen?c) if the two projects are mutually exclusive and the WACC is 10%, which project(s) should be chosen?d) Plot NVP profiles for the two projects. Identify the projects IRRs on the graph.e) If the WACC were 5% would this change your recommendation if the projects were mutually exclusive? If WACC were 15%, would this change your recommendation? Explain your answers.f) The crossover rate is 13.5252%. Explain what this rate is and how it affects the choice between mutually exclusive projects?g) Is it possible for conflicts to exist between the NPV and IRR when independent projects are being evaluated? Explain your answer.h) Now look at the regular and discounted paybacks. Which projects look better when judged by the paybacks?
Business
1 answer:
Reil [10]3 years ago
3 0

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

Download xlsx
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Clabber Company has bonds outstanding with a par value of $119,000 and a carrying value of $108,700. If the company calls these
Vladimir79 [104]

Answer:

option (b) $4,200 gain

Explanation:

Data provided in the question:

Par value of outstanding bonds  = $119,000

Carrying value of the bonds = $108,700

Price at which bond is called = $104,500

Now,

Gain on the retirement is calculated using the relation as;

Gain on retirement

= Carrying value of Bonds - Price at which bond is called

= $108,700 - $104,500

= $4,200

Since, the result is positive, therefore a gain will be recognized

Hence, correct answer is option (b) $4,200 gain

6 0
3 years ago
A mortgage clause that states that the mortgage is due and payable upon certain conditions, such as non-payment is: Select one:
ivolga24 [154]

A mortgage clause that states that the mortgage is due and payable upon certain conditions, such as the non-payment is the option(d) i.e, the Acceleration clause.

<h3>What is a mortgage clause?</h3>

A provision in an insurance policy (such as a fire insurance policy) that allows the designated mortgage to receive payment for property damage or loss.

There are different types of clauses:

  • Acceleration clause
  • Due-On-Sale clause
  • Prepayment Penalty clause
  • Subordination clause
  • Release clause

If the borrower breaches the conditions of the agreement, an acceleration clause in a mortgage or trust deed states that the entire obligation is payable immediately. Additionally, it will specify the circumstances under which a lender may request full loan payback. For instance, home loans frequently feature an acceleration provision that kicks in after a certain number of missed payments.

Most of the time, it is harmful to accelerate a loan. Typically, it denotes that the borrower has fallen behind on payments or broken the terms of the agreement, and the lender is requiring prompt repayment of the whole loan balance to avoid foreclosure.

To know more about mortgage clause refer to: brainly.com/question/13964240

#SPJ4

8 0
2 years ago
During 2016, Burr Co. made the following expenditures related to the acquisition of land and the construction of a building:
Colt1911 [192]

Answer:

$64,000 and $358,000

Explanation:

The computation is shown below:

For land:

= Purchase price of land + Legal fees for contracts to purchase land + Demolition of old building on site - Sale of scrap from old building

= $60,000 + $2,000 + $5,000 - $3,000

= $64,000

For building:

= Construction cost of new building (fully completed) + Architects’ fees

= $350,000 + $8,000

=$358,000

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4 years ago
The doctrine that makes a defendant liable even if the defendant is without fault is called...
Elanso [62]
<span>C: strict liability

I hope this helped ya :)</span>
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3 years ago
Who is this a random girl from the web or some one else
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Random girl from the web.
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