Management Team and Organizational Structure

Watts Co. is considering a project that has the following cash flow and cost of capital (r) data. What is the project's MIRR? No

Natasha_Volkova [10]

Answer:

MIRR = 15.65%

so correct option is b. 15.65%

Explanation:

solution

We will apply here formula for amount that is

A = P × $(1+\frac{r}{100} )^n$ ..................1

here A is future value and P is present value and r is rate and n is time period

so here future value of inflows will be

future value of inflows = [ 300 × (1.1)³ ] + [ 320 × (1.1)² ] + [ 340 × (1.1) ] + 360

future value of inflows = $1520.5

and MIRR will be here

MIRR = $(\frac{future value of inflows}{present value of outflows})^{\frac{1}{time period}} - 1$

MIRR = $(\frac{1520.5}{850})^{\frac{1}{4}} - 1$

MIRR = 15.65%

so correct option is b. 15.65%

7 0

3 years ago

Meat Packers, Incorporated (MPI) preserves and packages various kinds of meats for transportation to grocery stores. To prepar

Free_Kalibri [48]

Answer:

Variable cost=$750,000

Fixed costs= $13,000

Explanation:

Giving the following information:

The firm must purchase $60 in raw meat and pay $50 in wages for labor and $40 in fuel costs. Also, the firm rents a factory for $10,000 per month and makes 3,000 in monthly payments on meat packaging equipment. Suppose the firm prepares and transports 5,000 packages of meat per month.

Variable cost= raw meat + wages + fuel= (60 + 50 + 40)*5,000= $750,000

Fixed costs= rent + packaging equipment= 13,000

7 0

4 years ago

Rollins Corporation is estimating its WACC. Its target capital structure is 20% debt, 20% preferred stock, and 60% common equity

katrin2010 [14]

Answer:

A. What is the company's cost of preferred equity?

8.42%

B. What is the company's cost of common equity?

11.45%

C. What is the company's WACC?

9.31%

Explanation:

20% debt ⇒ after tax cost of debt 3.76%

20% preferred stock ⇒ 8.42%

60% common equity ⇒ 11.45%

in order to determine the after tax cost of debt we must first determine the yield to maturity of debt:

approximate YTM = {37.5 +[(1,000 - 1,150.78)/40]} / [(1,000 + 1,150.78)/2] = 33.7305 / 1,075.39 = 3.3166% x 2 = 6.2732%

after tax cost of debt = 6.2732% x 0.6 = 3.76%

cost of preferred stocks = 8 / (100 x 0.95) = 8 / 95 = 8.42%

cost of equity (Re) = 2.45% + (1.8 x 5%) = 2.45% + 9% = 11.45%

WACC = (60% x 11.45%) + (20% x 8.42%) + (20% x 3.76%) = 6.87% + 1.684% + 0.752% = 9.306% = 9.31%

3 0

4 years ago

A Corporation will pay a dividend of $1.75 per share at this year's end and a dividend of $2.25 per share at the end of next yea

g100num [7]

Answer:

$38.85

Explanation:

The computation of the maximum price would be willing to pay is shown below:

Current price = Future dividend × Present value of discount factor (rate of interest , time period)

= $1.75 ÷ 1.09 + $2.25 ÷ (1.09^2) + $42 ÷ (1.09^2)

= $1.61 + $1.89 + $35.35

= $38.85

Simply applied the above formula so that the maximum price could come

7 0

3 years ago

Read the paragraph below then answer the question. one of your friends who works at a local public tv station knows that you wis

patriot [66]

I think its Complementary
Hope i helped.

6 0

4 years ago