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Let irr be x%
At irr,present value of inflows=present value of outflows.
10,000=4000/1.0x+4000/1.0x^2+.................+4000/1.0x^10
Hence x=irr=38.45%(Approx).
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You use an Annuity Due approach to investing in your retirement. For the next 40 years, you invest $8500 per year into your retirement account where you will receive an 8% annual return. How much will you have in 40 years? (round to the nearest dollar) It depends on your Beta 2,201,980 2,378,139 340,000
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Which of the following project assessment methods would be best for evaluating the liquidity of a project? O MIRR O payback method ONPV O IRR
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Set this up carefully. You found a 2009 Toyota 4-Runner on sale for $22,311. The dealership says it will finance the entire amount with a one year loan. You will need to make monthly payments of $1,924. What is the ANNUALIZED interest rate on this loan. 8.6% O.97% 0.53% 6.37%
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NPV ensures that: we generate cash the most efficiently for our investors O we choose the greatest wealth creating opportunity for our investors Owe minimize the time to get wealthy for our investors o we choose the lowest risk opportunity for our investors
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Set this up carefully. You found a 2009 Toyota 4-Runner on sale for $22,311. The dealership says it will finance the entire amount with a one year loan. You will need to make monthly payments of $1,924. What is the ANNUALIZED interest rate on this loan. 8.6% .97% 53% 6.37%
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What is the present value of a $2000, 10 year, annual ordinary annuity at a 4% annual discount rate (round to nearest dollar) 1351 18,422 O 16,222 O 249,122
Buzz Lightyear has been offered an investment in which he expects to receive payments of $4,000 at the end of each of the next 10 years in return for an initial investment of $10,000 now. Enter percentage values to 2 decimals (10.52% entered as 10.52) a. What is the IRR of the proposed investment? % b. What is the MIRR of the proposed investment? Assume a cost capital of 10%. %
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What is the WACC of a company with the following capitalization. The company is in the 33% tax bracket, and floatation costs add 1.2% from the firm's perspective. Allocation Market Cost/ Expected Return Debt 5.5% 0.3 0.4 9.4% Retained Earnings Common Stock (new issue) 10.6% O 7.69% 08.05% O Not enough information
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Which of the following companies has the lowest after tax cost of debt. Company Market Cost of Debt Tax Bracket 10% 0.35 9% 0.2 12% 0.28 OB O A and B oc Ο Α
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The required return on retained earnings is 13%. The risk free rate is 2% and the Market Return is 9.5%. What is the company's beta? (hint: consider the CAPM) 0.47 O Cannot tell O 1.47 1.73