A side benefit of international trade is that it links national interests and increases the opportunity costs of war.

. explain the relationship in your answers to parts (b), (c), and (d). (select all the correct choices.) a. results from

Alex73 [517]

Results from (b), (c), and (d) are the same because all methods value Xia's assets today.

Here is the full question

Risk-free Interest Rate = 9.50%

Project A:

NPV = -$16,000 + $27,000/1.095

NPV = $8,657.53

Project B:

NPV = -$8,000 + $23,000/1.095

NPV = $13,004.57

Project C:

NPV = -$61,000 + $79,000/1.095

NPV = $11,146.12

All projects have positive NPV, and Xia has enough cash, so Xia should take all of them.

Answer b.

Total Value of Assets = Cash + NPV of Projects

Total Value of Assets = $100,000 + $8,657.53 + $13,004.57 + $11,146.12

Total Value of Assets = $132,808.22

Answer c.

Cash in hand to day = $100,000

Cash invested in projects = $16,000 + $8,000 + $61,000

Cash invested in projects = $85,000

Cash invested for 1 year = $100,000 - $85,000

Cash invested for 1 year = $15,000

Cash flow in 1 year = $15,000*1.095 + $27,000 + $23,000 + $79,000

Cash flow in 1 year = $145,425

Value of Xia today = $145,425/1.095

Value of Xia today = $132,808.22

Answer d.

Unused Cash = $100,000 - $85,000

Unused Cash = $15,000

Cash flow today = $15,000

Cash flow in 1 year = $27,000 + $23,000 + $79,000

Cash flow in 1 year = $129,000

Value of Xia today = $15,000 + $129,000/1.095

Value of Xia today = $132,808.22

Answer e.

Results from (b), (c), and (d) are the same because all methods value Xia's assets today.

Complete Question: The Xia Corporation is a company whose sole assets are$ 100 comma 000in cash and three projects that it will undertake. The projects are risk-free and have the following cash flows: (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)

Project

Cash Flow Today

Cash Flow in One Year

A

negative $ 16 comma 000

$ 27 comma 000

B

negative $ 8 comma 000

$ 23 comma 000

C

negative $ 61 comma 000

$ 79 comma 000

Xia plans to invest any unused cash today at the risk-free interest rate of 9.5 %.In one year, all cash will be paid to investors and the company will be shut down.

a. What is the NPV of each project? Which projects should Xia undertake and how much cash should it retain?

b. What is the total value of Xia's assets (projects andcash) today?

c. What cash flows will the investors in Xia receive? Based on these cash flows, what is the value of Xia today?

d. Suppose Xia pays any unused cash to investors today, rather than investing it. What are the cash flows to investors in thiscase? Based on these cash flows, what is the value of Xiatoday?

e. Explain the relationship in your answers to parts (a,b,c & d)

a. What is the NPV of each project?

The NPV of Project A is _____ (Round to the nearest cent.)

The NPV of Project B is ______(Round to the nearest cent.)

The NPV of Project C is _____(Round to the nearestcent.)

Which projects should Xia undertake and how much cash should itretain? (Select all the correct choices.)

A. Projects B and C have positive NPV, and Xia has enoughcash, so Xia should take them.

B.All projects have positive NPV, and Xia has enough cash, so Xia should take all of them.

C.Projects A and B have positive NPV, and Xia has enough cash, so Xia should take them.

D.Projects A and C have positive NPV, and Xia has enough cash, so Xia should take them.

b. What is the total value of Xia's assets (projects andcash) today?

The total value of Xia's assets (projects and cash) today is$_____ (Round to the nearest cent.)

c. What cash flows will the investors in Xia receive?

The cash flows Xia will pay to investors in one year is $____(Round to the nearest cent.)

Based on these cash flows, what is the value of Xia today?

Based on these cash flows, the value of Xia today is $____(Round to the nearest cent.)

d. Suppose Xia pays any unused cash to investors today, rather than investing it. What are the cash flows to investors in thiscase?

The amount of cash investors will receive today is $____(Round to the nearest cent.)

The amount of cash investors will receive in one year is $ ____(Round to the nearest cent.)

Based on these cash flows, what is the value of Xia today?

The value of Xia today is $___ (Round to the nearestcent.)

e. Explain the relationship in your answers to parts (b),(c), and (d). (Select all the correct choices.)

A. Results from (b), (c), and (d) are the same because all methods value Xia's assets today.

B. Whether Xia pays out cash now or invests it at the risk-free rate, investors get the same value today.

C. The point is that a firm cannot increase its value by doing what investors can do by themselves (and is the essence of the separation principle).

D. The point is that a firm can increase its value by more efficiently doing what investors can do by themselves (and is the essence of the separation principle).

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8 0

1 year ago

Morgan sued Rachel over a motor vehicle accident, but they settled the case prior to the trial for $1,000. The lawsuit is now __

Shtirlitz [24]

Answer:

moot

Explanation:

If a case is settled prior to trial for any cash, we say that the lawsuit is now subject to debate, and it is commonly known as moot. In several law schools across the globe, students are taught how to deal with moot. However, it is not very easy to give a ruling concerning moot, this is because there is little or no practical evidence. It is at sometimes referred to as moot court.

7 0

3 years ago

Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends.

klasskru [66]

If the required return on Computech is 18% the value of the stock in today's calculation is $11.77

<h3>What is the growth rate of a stock?</h3>

This is the percentage change of the stock based on the annualized growth rate over a period of time.

D3 = $0.75

D4 = 0.75 x 1.49 = $1.1175

D5 = 1.1175 x 1.49 = $1.665075

D6 = $1.665075 x 1.10 = $1.8315825

At a growth rate of 10 percent

$\frac{D6}{R-G}$

1.8315825/0.18-0.10

= $ $\frac{0.75}{1.18^3} +\frac{1.1175}{1.18^4} +\frac{1.665075}{1.18^5} +\frac{22.89478125}{1.18^5} \\$

= 0.456473 + 0.576394 + 0.7278196 + 10.0075198

= $11.77

The value of this stock today is $11.77

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7 0

3 years ago

Bramble Corp. incurs the following costs to produce 9900 units of a subcomponent: Direct materials$8316 Direct labor11187 Variab

matrenka [14]

Answer:

$3,762

Explanation:

The computation is as seen below

Total cost when the production is 9,900 units

Direct materials $8,316

Direct labor $11,187

Variable overhead $12,474

Total $31,977

But,

Their new cost on supplier offer is

= $2.85 × 9,900 units

= $28,215

In the case when the order is accepted, the net income would increase by

= $31,977 - $28,215

= $3,762

5 0

3 years ago

What is an action plan

lukranit [14]

A plan that will help you do what is needed

7 0

4 years ago