1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Sidana [21]
3 years ago
11

Assume that you are a new analyst hired to evaluate the capital budgeting projects of the company which is considering investing

in two CPEC projects, “Expansion Zone North” and “Expansion Zone East”. The initial cost of each project is Rs. 10,000. Company discount all projects based on WACC. Further, all the projects are equally risky projects and the company uses only debt and common equity for financing these projects. It can borrow unlimited amounts at an interest rate of rd 10% as long as it finances at its target capital structure, which calls for 50% debt and 50% common equity. The dividend for next period is $2.0, its expected that they will grow at the constant growth rate of 8%, and the company’s common stock sells for $20. The tax rate is 50%. The cash flows of both the projects are given in table below: Time Expansion Zone North Cashflows (amount in Rs.) Expansion Zone East Cashflows (amount in Rs.) 0 - 10,000 - 10,000 1 6,500 3,500 2 3,000 3,500 3 3,000 3,500 4 1,000 3,500 Carefully analyze the above table and answer the following questions in detail. I. Calculate the weighted average cost of capital for this firm? (2.5 marks) II. Compute each project’s IRR, NPV, payback, MIRR, and discounted payback. (2.5 Marks) III. Which project(s) should be accepted if they are mutually exclusive? Explain (1.5 Marks) IV. Which project(s) should be accepted if they are independent? Explain (1.5 Marks)
Business
2 answers:
Alchen [17]3 years ago
6 0

Answer:

Assume that you are a new analyst hired to evaluate the capital budgeting projects of the company which is considering investing in two CPEC projects, “Expansion Zone North” and “Expansion Zone East”. The initial cost of each project is Rs. 10,000. Company discount all projects based on WACC. Further, all the projects are equally risky projects and the company uses only debt and common equity for financing these projects. It can borrow unlimited amounts at an interest rate of rd 10% as long as it finances at its target capital structure, which calls for 50% debt and 50% common equity. The dividend for next period is $2.0, its expected that they will grow at the constant growth rate of 8%, and the company’s common stock sells for $20. The tax rate is 50%.

Alenkasestr [34]3 years ago
4 0

Answer:

Explanation:

Assume that you are a new analyst hired to evaluate the capital budgeting projects of the company which is considering investing in two CPEC projects, “Expansion Zone North” and “Expansion Zone East”. The initial cost of each project is Rs. 10,000. Company discount all projects based on WACC. Further, all the projects are equally risky projects and the company uses only debt and common equity for financing these projects. It can borrow unlimited amounts at an interest rate of rd 10% as long as it finances at its target capital structure, which calls for 50% debt and 50% common equity. The dividend for next period is $2.0, its expected that they will grow at the constant growth rate of 8%, and the company’s common stock sells for $20. The tax rate is 50%. The cash flows of both the projects are given in table below: Time Expansion Zone North Cashflows (amount in Rs.) Expansion Zone East Cashflows (amount in Rs.) 0 - 10,000 - 10,000 1 6,500 3,500 2 3,000 3,500 3 3,000 3,500 4 1,000 3,500 Carefully analyze the above table and answer the following questions in detail. I. Calculate the weighted average cost of capital for this firm? (2.5 marks) II. Compute each project’s IRR, NPV, payback, MIRR, and discounted payback. (2.5 Marks) III. Which project(s) should be accepted if they are mutually exclusive? Explain (1.5 Marks) IV. Which project(s) should be accepted if they are independent? Explain (1.5 Marks)

You might be interested in
How does Wikipedia work? What is different about this operation from other encyclopedias?
Eddi Din [679]
It is different because people actually have the option of correcting the information or putting false things too.
7 0
3 years ago
Read 2 more answers
HOURS
IrinaVladis [17]

Answer:

what's the question

Explanation:

its not said or is. it

3 0
3 years ago
True or false: When units produced are less than units sold, net income under absorption costing will be less than net income co
Oliga [24]

Answer:

True

Explanation:

Generally, net income will be the same under absorption costing and variable costing. However, producing fewer units than units sold will decrease the net income under absorption costing. As whatever the variable cost is under the absorption method, fixed manufacturing overhead remains the same that decreases the gross profit and net income. Under the variable costing, the fixed overhead will be calculated as per the units produced. Therefore, the net income will decrease proportionately.

6 0
3 years ago
What is advertisement
Elis [28]

Answer:

Advertising is a marketing communication that employs an openly sponsored, non-personal message to promote or sell a product, service or idea. Sponsors of advertising are typically businesses wishing to promote their products or services.

Explanation:

5 0
3 years ago
Google Ads was constructed around three core principles, focused on helping businesses reach their online potential. The first o
tia_tia [17]
Yes helpful information
4 0
3 years ago
Other questions:
  • Quantitative Problem: You need $11,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortiz
    12·1 answer
  • Keithomp, a company that manufactures and exports candies, sells different flavors of candy depending on the taste preferences o
    7·1 answer
  • Marigold Corp.reported the following items for 2019: Income tax expense $50000 Contribution margin 120000 Controllable fixed cos
    11·1 answer
  • In 2021, Ryan Management collected rent revenue for 2022 tenant occupancy. For financial reporting, the rent is recorded as defe
    12·1 answer
  • It is estimated that the net cash flows to be received from the copyright will be $63,000, and its fair value is $59,850. The ac
    10·1 answer
  • Quick answer needed!
    7·1 answer
  • Which best compares and contrasts the teaching and training careers and the professional support careers? Both careers try to su
    14·2 answers
  • E6-9 Reporting Purchases, Purchase Discounts, and Purchase Returns Using a Perpetual Inventory System [LO 6-3] During the month
    13·1 answer
  • Larry recorded the following donations this year: $500 cash to a family in need $2,400 to a church $500 cash to a political camp
    6·1 answer
  • Before purchasing a chemical, one should ask if the chemical is commonly used. how does one know whether or not a chemical is co
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!