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The All-Mine Corporation is deciding whether to invest in a new one-year project. The project would have to be financed by equit

Lerok [7]

A. NPV of the project

NPV = -2000 + 2500/(1.15) = $173.91

B. Value of the firm and its debt and equity components before and after the project addition.

Determine expected cash flows before the project.

($3,000 + $3,000 + $1,000)/3)/1.15 = $2,333.33/1.15 = $2,028.99

($1,500 + $0 + $0)/3)/1.15 = $500/1.15=$434.78

Determine value with project.

($3,000 + $3,000 + $3,000)/3)/1.15 =$3,000/1.15 = $2,608.70

($4,000 + $2,500 + $500)/3)/1.15 = $2,333.33/1.15=$2,028.99

C. The company should not take the project because the NPV does not go to equity but to bond holders.

5 0

4 years ago

If some activity creates external benefits as well as private benefits, then economic theory suggests that the activity ought to

oee [108]

Answer:

C. Subsidized

Explanation:

According to the economic theory, subsidies could be used to counter market weaknesses and externalities so that greater economic performance is achieved. Subsidy refers to the release of funds from the government to an individual, business, or entity. This results in a decrease in the value of the subsidized product. This support could be either in the form of cash or kind and is usually given to support a social or economic policy. The purpose of the subsidy is to promote the interests of society. It is part of the government 's non-planned expenditure.

7 0

3 years ago

DuPont system of analysis Use the following ratio information for Johnson International and the industry averages for Johnson's

Verizon [17]

Answer:

a) DuPont analysis for Johnson International

2013: 0.059 x 2.11 x 1.75 = 0.2179 = 21.79%

2014: 0.058 x 2.18 x 1.75 = 0.2213 = 22.13%

2015: 0.049 x 2.34 x 1.85 = 0.2121 = 21.21%

b) DuPont analysis for industry averages

2013: 0.054 x 2.05 x 1.67 = 0.2121 = 21.21%

2014: 0.047 x 2.13 x 1.69 = 0.1692 = 16.92%

2015: 0.041 x 2.15 x 1.64 = 0.1446 = 14.46%

c) Johnson International's drivers follow the same tendency as the industry's average, e.g. net profit margin decreased in a similar manner, and total asset turnover increased also in a similar manner to the industry's average. The only driver that doesn't follow the industry's trend is financial leverage. While other companies in the same industry decreased their financial leverage, Johnson increased it. You should further analyze why this happened and what are the potential consequences.

Explanation:

The DuPont analysis is used to break down ROE into 3 different components and that way you can analyze whether a company's high ROE comes along with a high risk. The following formula is used to calculate ROE based on 3 different factors:

R OE = net pro fit margin x total assets turnover x financial leverage

8 0

4 years ago

Jerica wants to watch videos about careers in the construction field. which resource would be most helpful for this? careeronest

Nuetrik [128]

The resource would be most helpful for this careeronestop hence option A is the correct answer.

<h3>What is Careeronestop?</h3>

Careeronestop is an online tool that seeks to help job seekers and the unemployed get the right information they need about their next job or the job they are about to apply to.

Careeronestop provides resources ranging from videos, training, and workshops.

Learn more about Careeronestop here:

brainly.com/question/24731439

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3 0

2 years ago

Calloway department store buys jackets for $19.75 each and sells them for $37.88 each. what is the markup rate based on cost?

Svet_ta [14]

Answer : The markup rate based on cost is 91.79747%.

We have

Selling price per jacket = $37.88

Cost per jacket = $19.75