Question #2:
Domestic versus MNC Valuation
a. IBM wants to undertake a 5yrs
project in the USA...
Question #2:
Domestic versus MNC Valuation
a. IBM wants to undertake a 5yrs
project in the USA that has the projected free cash flow stream
shown below. What is the net present value (NPV) of the project if
the WACC is 10%? Assume the initial investment is $6,500
Years : 2019 2020 2021 2022 2023
Free Cash
Flows : $1,000 $2,000 $3,000 $4,000 $5,000
What NPV & IRR?
b. Assume the project will be
undertaken by IBM’s subsidiary in Canada with the same forecasted
free cash flow stream. What is the NPV of the...
Please calculate the yearly NPV and IRR. We want positive
present value in 3 years. You...
Please calculate the yearly NPV and IRR. We want positive
present value in 3 years. You may adjust Yearly O&M, Periodic
Costs, interest rate (5%), or total debt as you see fit to meet
these criteria. Revenue and Fees are in 1000s of dollars.
Year
Revenue
Growth
NPV
IRR
Total
45,500,000
2020
$1,813
Debit
80%
2021
$2,268
25.1%
Equity
20%
2022
$13,301
487.0%
i
5%
2023
$16,144
21.4%
No. of payments (n)
7
2024
$17,847
10.5%
Yearly O&M costs
500,000...
Your company is contemplating on investing in a manufacturing
facility in China. You are charged with...
Your company is contemplating on investing in a manufacturing
facility in China. You are charged with doing the financial
analysis for this project. You expect the cash flows (in Chinese
RMB) for this project to last indefinitely. You estimated the
following cash flows for 2019-2024 and that the cash flows will
grow at a constant rate starting 2025
Year
FCF
Other Data
2019
-50,000,000 RMB
Growth rate of RMB FCF starting 2025 = 2%
2020
6,000,000 RMB
Cost of Capital...
Net Present Value of Payouts The NPV of a series of values is
calculated using a...
Net Present Value of Payouts The NPV of a series of values is
calculated using a discount rate applied to those values. Apply the
NPV function to the series of expected benefit payouts using .075
as the discount rate. You can hard-code the discount rate. How
would you calculate this in Excel? Please show calculation and
logic used in excel, so I understand. Below are the values:
Year
Expected Benefit Payouts
2016
NA
2017
$19,661,882,100.00
2018
$19,909,120,629.23
2019
$20,162,051,346.58
2020...
Question
Suppose a company has project X with
the following cash flows to evaluate.
Calculate NPV...
Question
Suppose a company has project X with
the following cash flows to evaluate.
Calculate NPV and Estimate the IRR of project X using the data
given at a cost of capital of
10%.
10 marks
Project
Y
Cash
flows
Year
K’000
0
(30,000)
1
2000
2000
150,000
140,000
Examine when you will payback initial cash outflow and also
apply how this helps us to implement Appraisal
process.
10...
1. Using the incremental cash
flows, and WACC computes the following and the state in each...
1. Using the incremental cash
flows, and WACC computes the following and the state in each case
whether the company should go ahead with the project.
WACC is 10.76%
Net Cash Flow
0 years
2015
1 year
2016
2 years
2017
3 year
2018
4 year
2019
($26,000)
$6,582
$7,194
$6,948
$ 23,999
a. Payback
b. NPV
c. IRR
d. Profitability Index
Stark Enterprises is considering a new project to defend Earth
from future attacks.
The Asgardian equipment...
Stark Enterprises is considering a new project to defend Earth
from future attacks.
The Asgardian equipment called bifrost costs? $2,000,000.
The bifrost will produce a stream of future cash flows as
follows.
?Year USD
?2019 700,000
?2020 700,000
?2021 700,000
?2022 500,000
?2023 500,000
?2024 500,000
?2025 500,000
?2026 500,000
?2027 500,000
?2028 500,000
?2029 500,000
?2030 800,000
?2031 800,000
?2032 800,000
?2033 800,000
Stark Enterprises has following capital structure.
?35% Debt,? 25% preference shares and rest in common equity....
The following amortization and interest schedule reflects the
issuance of 10-year bonds by Capulet Corporation on...
The following amortization and interest schedule reflects the
issuance of 10-year bonds by Capulet Corporation on January 1,
2014, and the subsequent interest payments and charges. The
company’s year-end is December 31, and financial statements are
prepared once yearly.
Amortization Schedule
Year
Cash
Interest
Amount
Unamortized
Carrying
Value
1/1/2014
$5,651
$ 94,349
2014
$11,000
$11,322
5,329
94,671
2015
11,000
11,361
4,968
95,032
2016
11,000
11,404
4,564
95,436
2017
11,000
11,452
4,112
95,888
2018
11,000
11,507
3,605
96,395
2019
11,000
11,567...