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TIME: 3 HOURS INSTRUCTIONS: (100 MARKS) Answer ALL questions in the answer booklet (25 MARKS) QUESTION 1 A Combi Bhd is considering purchasing a machine that would cost RM201,600 and has a useful life of 9 years. The machine would reduce cash operating costs by RM37,334 per annum. The machine would have a salvage value of RM30,240 at the end of the project. Required: a) Compute the payback period for the machine (3 marks) b) Compute the simple rate of...
TIME: 3 HOURS INSTRUCTIONS: (100 MARKS) Answer ALL questions in the answer booklet (25 MARKS) QUESTION 1 A Combi Bhd is considering purchasing a machine that would cost RM201,600 and has a useful life of 9 years. The machine would reduce cash operating costs by RM37,334 per annum. The machine would have a salvage value of RM30,240 at the end of the project. Required: a) Compute the payback period for the machine (3 marks) b) Compute the simple rate of...
Show all work. Highlight final answer. DO NOT answer questions if you cannot answer them all. 15. Automated Manufacturers uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,480,000 to purchase plus an additional $52,000 a year to operate. The machines have a 6-year life after which they are worthless. What is the equivalent annual cost of one these machines if the required return is 16 percent? (a) -S453,657 (b) -$427,109 (c)...
Question 1 If you know the future value or worth of something and would like to know what its present value or worth is, which interest factor could you use? Present worth factor for a uniform series Capital recovery factor Present worth factor for a single payment Compound amount factor Question 2 If you are given a series of payments into the future and want to know their present value or worth, what is the best interest factor to use?...
Part B: Answer all the questions (15 marks each) Question 1: (15 marks) KB Machine Limited is considering investing $3 million in new machinery, Model X. If the new model is acceptable, the old machine will be disposed at $500,000 immediately. A feasibility study, completed by consultants at a cost of $300,000, has confirmed that the equipment will help increase output and improve quality. The expected sales so generated amount to $1 million per year over the life of the...
please help me solve the following 6!! please only attempt if you can solve ALL 6! thank you so much for your time, will rate! ? The expected return on an asset you currently own is 12% and the required return is 9%. You should probably Owait and see what happens to actual returns before making a decision short the asset now. buy more of the asset now ignore the expected return sell the asset now. Which of the following...
Please answer all three. Thank you. lowa Corn Cooperative Corp. ("ICCC") grows and distributes corn to food manufacturers. ICCC has some bonds outstanding with 13 years to maturity, are trading at $1,043.25 per bond with a $1,000 face value, and the company has 350,000 of these bonds outstanding. The bonds pay interest annually based on an 7 25% coupon interest rate ICCC is planning to issue $30 million of new preferred stock, which will have a par value of $150.00...
please conplete all parts to the question. i added some photos of answer choices to go by but not all of them 4. Analysis of a replacement project At times firms will need to decide if they want to continue to use their current equipment or replace the equipment with newer equipment. The company will need to do replacement analysis to determine which option is the best financial decision for the company. LORUSSO Co. is considering replacing an existing piece...
Question 1. Issues in Capital Budgeting (30 marks-45 minutes) a. "Both the NPV and the IRR rules will always lead to the same decision being made irrespective of whether you are evaluating a capital investment project in isolation or two mutually exclusive projects." Critically discuss this statement. (5 marks) b. Your company is considering whether to invest in a new machine that costs R6m but will save the company R2.5m per year for the three years of its expected life....
Respecfully--Please answer all if you are willing to help. This is over MM propositions anf optimal capital structure theories QUESTION 1 With perfect capital markets, because different choices of capital structure offer a benefit to investors, the capital structure affects the value of a firm. True False QUESTION 2 Under the assumptions of Modigliani and Miller, a firm's value does not depend on the fraction of its financing that it raises from debt holders vs. equity holders. True False QUESTION...