ZuoTi.Pro
Question

Question 4: General Motors is thinking about t hree years Can you explain use the three nolons t whether
business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer:

Initial Investment =$365 millions

Yield=$420 millions

r=4%

n=3 years

So PV of Investment= 420/(1+4%)^3 - 365=$8.37 millions

FV of Investment=420-365*(1+4%)^3=$9.42 millions

let i is the IRR

420/(1+i)^3=365

i=4.79%

0 0
Add a comment
Know the answer?
Add Answer to:
Question 4: General Motors is thinking about t hree years Can you explain use the three...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Question 2 (evaluating investment projects) General Motors (or Toyota) is thinking of investing in new production...

    Question 2 (evaluating investment projects) General Motors (or Toyota) is thinking of investing in new production equipment, which will cost $500 million in year zero, and will generate cost savings of $300 million in year 1, $200 million in year 2, and $150 million in year 3. After 3 years, the salvage value is zero. The cost of capital (discount rate) is 25% for General Motors and 10% for Toyota. (Due to GM's recent bankruptcy, investors are scared to lend...

  • General Motors (or Toyota) is thinking of investing in new production equipment, which will cost $350...

    General Motors (or Toyota) is thinking of investing in new production equipment, which will cost $350 million in year zero, and will generate cost savings of $210 million in year 1, $140 million in year 2, and $105 million in year 3. After 3 years, the salvage value is zero. The cost of capital (discount rate) is 25% for General Motors and 10% for Toyota. (Due to GM's recent bankruptcy, investors are scared to lend it money, so GM has...

  • General Motors (or Toyota) is thinking of investing in new production equipment, which will cost $150...

    General Motors (or Toyota) is thinking of investing in new production equipment, which will cost $150 million in year zero, and will generate cost savings of $90 million in year 1, $60 million in year 2, and $45 million in year 3. After 3 years, the salvage value is zero. The cost of capital (discount rate) is 25% for General Motors and 10% for Toyota. (Due to GM's recent bankruptcy, investors are scared to lend it money, so GM has...

  • Q1. Use the EV/EBITDA multiple of General Motors to value the Tesla share. Use information in...

    Q1. Use the EV/EBITDA multiple of General Motors to value the Tesla share. Use information in the table below to complete this question. a) What is the per share value of Tesla based on the EV/EBITDA multiple of General Motors?' b) Would you consider Tesla to be over-valued relative to General Motors and recommend that investors sell shares of Tesla based on your answers to part of this question? Briefly explain. Company (period ending date) General Motors (GM) (30th Dec,...

  • Question 21 Planet Motors manufactures general and special purpose industrial motors. Planet's management is worried about...

    Question 21 Planet Motors manufactures general and special purpose industrial motors. Planet's management is worried about increasing competition in its industry as a global industrial motor manufacturer has recently shown a keen interest in entering the same customer market as served by Planet. The management is most concerned about the fact that it may lose a significant amount of sales revenue should this competitor make an entry into Planet's market. A description of Planet's top risk, an inherent risk assessment,...

  • Jim and his wife Pam are thinking about buying a house in Philadelphia in three years....

    Jim and his wife Pam are thinking about buying a house in Philadelphia in three years. They will have $190,000 from the sale of their house in Scranton. They are planning on putting the money from the sale into an account that pays 5.0% APR compounded monthly. They will also contribute $3,000 to the account per year. They will live in an apartment for the three years between the move. How expensive can their house in Philadelphia be if they...

  • You are thinking of using a t procedure to test hypotheses about the mean of a...

    You are thinking of using a t procedure to test hypotheses about the mean of a population using a significance level of 0.05. You suspect that the distribution of the population is not normal and may be moderately skewed. Which of the following statements is correct? (A) You may use the t procedure provided your sample size is large. (B) You should not use the t procedure because the population does not have a normal distribution. (C) You may only...

  • Choose one microeconomic concept applied in your final project of the general motors company. Explain your...

    Choose one microeconomic concept applied in your final project of the general motors company. Explain your findings and the implications to your chosen firm's sustainability. Using the same microeconomic concept chosen above, explain how it would be applied to the firm where you work or the type of firm you hope to work for in the future. What does this imply about this firm's future?

  • Question 1 [30 marks] Income statements for Beach Motors (Pty) Ltd. for the past two years...

    Question 1 [30 marks] Income statements for Beach Motors (Pty) Ltd. for the past two years are as follows: (amounts in thousands of Rands) 2018 2017 Sales revenue R 70,000 R 60,000 Cost of goods sold 42,000 30,000 Gross profit R 28,000 R 30,000 Selling and administrative expenses 20,000 14,000 Operating income R 8,000 R16,000 Interest expense 2,000 2,000 Income before tax R6,000 R14,000 Income tax expense 2,000 3,000 Net income R4,000 R11,000 Required: 1. Prepare common-size comparative income statements...

  • Question 1 [30 marks] Income statements for Beach Motors (Pty) Ltd. for the past two years...

    Question 1 [30 marks] Income statements for Beach Motors (Pty) Ltd. for the past two years are as follows: (amounts in thousands of Rands)    2017    2018 Sales revenue R     70,000 R 60,000 Cost of goods sold 42,000 30,000 Gross profit R     28,000 R 30,000 Selling and administrative expenses 20,000 14,000 Operating income R 8,000 R16,000 Interest expense 2,000 2,000 Income before tax R 6,000 R14,000 Income tax expense 2,000 3,000 Net income R 4,000 R11,000 Required: 1. Prepare...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT