Orange Valley Industrial has a weighted-average cost of capital of 7.17 percent and is evaluating two...
Orange Valley Industrial has a weighted-average cost of capital of 7.17 percent and is evaluating two projects: A and B. Project A involves an initial investment of 5,400 dollars and an expected cash flow of 7,560 dollars in 4 years. Project A is considered more risky than an average-risk project at Orange Valley Industrial, such that the appropriate discount rate for it is 2.03 percentage points different than the discount rate used for an average-risk project at Orange Valley Industrial. The internal rate of return for project A is 8.78 percent. Project B involves an initial investment of 6,142 dollars and an expected cash flow of 10,749 dollars in 9 years. Project B is considered less risky than an average-risk project at Orange Valley Industrial, such that the appropriate discount rate for it is 1 percentage points different than the discount rate used for an average-risk project at Orange Valley Industrial. The internal rate of return for project B is 6.42 percent. What is X if X equals the NPV of project A plus the NPV of project B?
Homework Answers
Add Answer to:
Orange Valley Industrial has a weighted-average cost of capital
of 7.17 percent and is evaluating two...
Silver Sun Recycling has a weighted-average cost of capital of 8.34 percent and is evaluating two...
Silver Sun Recycling has a weighted-average cost of capital of 8.34 percent and is evaluating two projects: A and B. Project A involves an initial investment of 4,818 dollars and an expected cash flow of 8,865 dollars in 6 years. Project A is considered more risky than an average-risk project at Silver Sun Recycling, such that the appropriate discount rate for it is 1.22 percentage points different than the discount rate used for an average-risk project at Silver Sun Recycling....
Yellow Sand Banking has a weighted-average cost of capital of 7.08 percent and is evaluating two...
Yellow Sand Banking has a weighted-average cost of capital of 7.08 percent and is evaluating two projects: A and B. Project A involves an initial investment of 6,250 dollars and an expected cash flow of 10,313 dollars in 4 years. Project A is considered more risky than an average-risk project at Yellow Sand Banking, such that the appropriate discount rate for it is 1.18 percentage points different than the discount rate used for an average-risk project at Yellow Sand Banking....
Red Royal Consulting has a weighted-average cost of capital of 8.51 percent and is evaluating two...
Red Royal Consulting has a weighted-average cost of capital of 8.51 percent and is evaluating two projects: A and B. Project A involves an initial investment of 4,527 dollars and an expected cash flow of 6,700 dollars in 6 years. Project A is considered more risky than an average-risk project at Red Royal Consulting, such that the appropriate discount rate for it is 1.24 percentage points different than the discount rate used for an average-risk project at Red Royal Consulting....
show steps plz, if possible White Mountain Packaging has a weighted average cost of capital of...
show steps plz, if possible
White Mountain Packaging has a weighted average cost of capital of 10.52 percent and is evaluating two projects: A and B. Project A involves an initial investment of 5,151 dollars and an expected cash flow of 9,169 dollars in 4 years. Project A is considered more risky than an average-risk project at White Mountain Packaging, such that the appropriate discount rate for it is 1.18 percentage points different than the discount rate used for an...
Orange Valley Aviation is evaluating a 1-year project that would involve an initial investment in equipment of 29,200 do...
Orange Valley Aviation is evaluating a 1-year project that would involve an initial investment in equipment of 29,200 dollars and an expected cash flow of 32,300 dollars in 1 year. The project has a cost of capital of 9.62 percent and an internal rate of return of 10.62 percent. If Orange Valley Aviation were to use 29,200 dollars in cash from its bank account to purchase the equipment, the net present value of the project would be 266 dollars. However,...
Based upon the following facts calculate the Weighted Average Cost of Capital (WACC) for Student Success...
Based upon the following facts calculate the Weighted Average Cost of Capital (WACC) for Student Success Corporation (SSC): PART 1 WACC Tax rate 40 % Debt Financing: $10,000 Face Value 10-Year, 5 % Coupon, Semiannual Non-Callable Bonds Selling for $11,040 New bonds will be privately placed with no flotation cost. >Common Stock: Current Price $40; Current Dividend $3.00 and Growth Rate 5 %. >Common Stock: Beta 1.1; Risk Free Rate 2.0 %; Required Return of the Market 7% Capital structure:...
Calculating Weighted Average Cost of Capital and Economic Value Added (EVA) Ignacio, Inc., had after-tax operating...
Calculating Weighted Average Cost of Capital and Economic Value Added (EVA) Ignacio, Inc., had after-tax operating income last year of $1,195,000. Three sources of financing were used by the company: $2 million of mortgage bonds paying 4 percent interest, $5 million of unsecured bonds paying 6 percent interest, and $10 million in common stock, which was considered to be relatively risky (with a risk premium of 8 percent). The rate on long-term treasuries is 3 percent. Ignacio, Inc., pays a...
Calculating Weighted Average Cost of Capital and Economic Value Added (EVA) Ignacio, Inc., had after-tax operating inco...
Calculating Weighted Average Cost of Capital and Economic Value Added (EVA) Ignacio, Inc., had after-tax operating income last year of $1,196,500. Three sources of financing were used by the company: $1 million of mortgage bonds paying 4 percent interest, $5 million of unsecured bonds paying 6 percent interest, and $11 million in common stock, which was considered to be relatively risky (with a risk premium of 8 percent). The rate on long-term treasuries is 3 percent. Ignacio, Inc., pays a...
Chapter 9/10/11 , 2019 Based upon the following facts calculate the Weighted Average Cost of Capital...
Chapter 9/10/11 , 2019 Based upon the following facts calculate the Weighted Average Cost of Capital (WACC) for Student Success Corporation (SSC): PART 1 – WACC Tax rate = 40% Debt Financing: $10,000 Face Value 10-Year, 5% Coupon, Semiannual Non-Callable Bonds Selling for $11,040 New bonds will be privately placed with no flotation cost. Common Stock: Current Price $40; Current Dividend = $3.00 and Growth Rate = 5%. Common Stock: Beta = 1.1; Risk Free Rate...
What is Odarian's weighted average cost of capital? Use the NPV function in Excel to find...
What is Odarian's weighted average cost of
capital?
Use the NPV function in Excel to find the project's
NPV? Should Odarian open the coffee s
hop? Explain.
3. Consider the following information for Odarian, Inc. Odarian's target capital structure is 38% long-term debt, 15% preferred stock and 67% equity. The firm has one outstanding 8.03% bond issue that matures on November 7, 2039 makes semiannual payments, and currently sells for $851 per bond. Assume that November 7, 2019, is the...
show steps plz, if possible
White Mountain Packaging has a weighted average cost of capital of 10.52 percent and is evaluating two projects: A and B. Project A involves an initial investment of 5,151 dollars and an expected cash flow of 9,169 dollars in 4 years. Project A is considered more risky than an average-risk project at White Mountain Packaging, such that the appropriate discount rate for it is 1.18 percentage points different than the discount rate used for an...
Based upon the following facts calculate the Weighted Average Cost of Capital (WACC) for Student Success Corporation (SSC): PART 1 WACC Tax rate 40 % Debt Financing: $10,000 Face Value 10-Year, 5 % Coupon, Semiannual Non-Callable Bonds Selling for $11,040 New bonds will be privately placed with no flotation cost. >Common Stock: Current Price $40; Current Dividend $3.00 and Growth Rate 5 %. >Common Stock: Beta 1.1; Risk Free Rate 2.0 %; Required Return of the Market 7% Capital structure:...
Calculating Weighted Average Cost of Capital and Economic Value Added (EVA) Ignacio, Inc., had after-tax operating income last year of $1,196,500. Three sources of financing were used by the company: $1 million of mortgage bonds paying 4 percent interest, $5 million of unsecured bonds paying 6 percent interest, and $11 million in common stock, which was considered to be relatively risky (with a risk premium of 8 percent). The rate on long-term treasuries is 3 percent. Ignacio, Inc., pays a...
What is Odarian's weighted average cost of
capital?
Use the NPV function in Excel to find the project's
NPV? Should Odarian open the coffee s
hop? Explain.
3. Consider the following information for Odarian, Inc. Odarian's target capital structure is 38% long-term debt, 15% preferred stock and 67% equity. The firm has one outstanding 8.03% bond issue that matures on November 7, 2039 makes semiannual payments, and currently sells for $851 per bond. Assume that November 7, 2019, is the...
Most questions answered within 3 hours.
-
Humans have used horses for transportation for millions of
years. Therefore, they will use horses for...
asked 1 hour ago -
The following are the Jensen Corporation's unit costs of making
and selling an item at a...
asked 1 hour ago -
Does direct Medicare reimbursement of Advanced practice nurses
increase access to their services?
asked 2 hours ago -
List and explain why a company would choose to use a
published
compensation survey vs. creating...
asked 2 hours ago -
A discrete random variable X can take values from 1 to 10. Find
the variance of...
asked 3 hours ago -
The primary financial goal of a corporation is to maximize:
shareholders wealth.
earnings per share.
stock...
asked 3 hours ago -
determine whether the vectors u=(1,2,3,), v=(-2,1,0) and
w=(1,0,1) are linearly dependent or independent.
asked 3 hours ago -
python
Define a function called print_values which takes a dictionary
object as a parameter. The function...
asked 4 hours ago -
In Chapter 1 you created a program named Triangle in
which you displayed a seven-line triangle...
asked 4 hours ago -
Research question: What are the differences between separately
stated and non separately stated transactions in an...
asked 4 hours ago -
By using Arduino write a code that connects two LEDs to two
push-buttons. Each button controls...
asked 5 hours ago -
Bank of America has bonds that pay a coupon interest rate of 5.5
percent and mature...
asked 6 hours ago