Question

Eunity to lease out a warehouse instead of using h would have to pay in the next year. D) The cost of a marketing study completed last year ew proshuction 25) A firm is considering a new project that will genetate year for five years. The necessary four years. Whatment necessary for the project will coos revervae od $1,000,000 and cash espenses of $700,000 per the expected free cash flow in the second year of the project i and will be depreciabed straight line over the firm's marginal tax rate is 35%? 25) A) $195,000 8) $245,000 C$162,500 D)212.500 26) Which of the following best MACRS rather than straight-line depreciation? 26) expilains why is it sensible for a firm to use an accelerated depreciation schedule such as is it expenses. many years an item may be depreciated, thus allowing it fuall control of its depreciation B) The firm will have substantially fewer depreciation expenses Q) The firm will substantially decrease its depreciation tax D) The firm will receive greater value (NPv) later in the depreciation timeline. shield across all of the depreciation timeline. benefits to its cash flow earlier in the depreciation timeline and thus increase net present use the table for question #27 below. Year o Year Year2 Year 3 400,000 400,000 400,000 180,000 180,000 180,000 100.000100,000 100,.000 120,000 120,000 120,000 42.00042.00042,000 Revenues -Cost of Goods Sold -EBIT 8,000 78,000 78,000 100,000 100,000 100,000 -Unlevered net income 20,000 -20,000 -20,000 158,000 158,000 158,00 -Additions to Net Working Capital -Free Cash Flow 27) Visby Rides, a livery up with the above estimates of free cash fow from this project. By how much could the discount rate rise before the m present value (NPV) of this project is zero, given that it is currently 10%? car company, is considering buying some new luxury cars. After extensive research, they com C)by27%% D) by 25% A)by 22% B)by17% 28) Which of the following is the appropriate way to calculate the price of a share of a given company using the fre 28) flow valuation model? A) Po-[Divi/(E-)(Shares Outstandingo) B) Po-(Vo+ Casho - Debto)/(Shares Outstandingo) C) Po - PV(Future Free Cash Flow of Firm)/(Shares Outstandingo) D) Po-Divi/CE-8 29) If you want to value a firm that consistently pays out its earnings as dividends, the simplest model for you the 29)