Answer:
$3,210.94
Explanation:
The NOPAT of the Edwards electronics can be determined through the following mentioned method.
Sales: $11,250
Operating costs: ($5,500)
Depreciation: ($1,250)
Interest payment ($218.75)
($3,500*6.25%)
Profit before tax $4,281.25
Taxes(25%) ($1,070.31)
NOPAT $3,210.94
Answer:
PV Index = 1.158
Explanation:
Present value index is the ratio of discounted cash flows of the project divided by initial outlay required for the project thus first we calculate the Present Values for Investment B
Present value factors @ 12% for year 0, 1, 2, 3, 4 respectively.
1
0.893
0.797
0.712
0.636
Net Present Value = -9000 + (5000 * 0.893) + (4000 * 0.797) + (3000 * 0.712) + (1000 * 0.636)
NPV = $1425
Present value Index = NPV / Initial investment = 1425/9000 = 0.158
This can be interpreted as 1 + 0.158 = 1.158,
1 being the initial investment. You can also choose not to subtract the initial outlay when calculating NPV.
Hope that helps.
Answer:
the formula used to calculate the cost of equity (required rate of return) based on the bond yield plus risk premium is fairly simple:
cost of equity (Re) = yield of debt (bonds) + firm's risk premium = 11.52% + 3.55% = 15.07%
I'm not sure if the question was copied correctly or not, so I looked for similar questions and it included different numbers.
<em>The Harrison Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Harrison's bonds yield 10.28%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.95%. Based on the bond-yield-plus-risk-premium approach, Harrison's cost of Internal equity is: = 10.28% + 4.95% = 15.23%</em>
<em>Another question: </em>
<em>The Kennedy Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Kennedy's bonds yield 11.52%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.95%. Based on the bond-yield-plus-risk-premium approach, Kennedy's cost of internal equity is: = 11.52% + 4.95% = 16.47%</em>
Answer:
$100,000
Explanation:
If the individual transfers personal property to a tax-exempt entity and the corporation uses the asset in a similar way to its tax-exempt intent, the individual is entitled to subtract the property's fair value.
in this scenario, Maple Corp. has the right to deduct $100,000 (market value of painting) from his taxable income.
Answer:
Aquaguard may choose any of the two models to minimize the production variability in the new plant.
Explanation:
Model 1: Mean = 1000, Standard Deviation(SD) = 300
Model 2: Mean = 1000, SD = 300
Model 3: Mean = 1000, SD = 300
Coefficient of variation for model 1
C.V = ( SD ÷ Mean) × 100
= ( 300 ÷ 1000 ) × 100
= 30 %
Coefficient of variation for model 2
= ( 300 ÷ 1000 ) × 100
= 30 %
Coefficient of variation for model 3
= ( 300 ÷ 1000 ) × 100
= 30 %
We conclude that all the models have same effect .
