Ben Ltd wishes to expand its manufacturing plant by purchasing a new state of art equipment. The company recently paid shs.20,000,000 for a market survey in respect of the new venture. You have been provided with the following information relating to the project. (i) For purposes of undertaking this venture, the company has obtained a loan from CEB Bank for shs.280,000,000 at an annual interest rate of 15% p.a. The equipment will be purchased from Brussels at a cost of shs.400,000,000. (ii) An additional shs.50,000,000 will be required to transport the equipment to Masaka and the cost of installing the equipment is shs.10,000,000. (iii)The firm will benefit from an investment incentive offered by the government of 8% of the invoice value of the equipment. (iv) The machines will be installed in a warehouse that had been generating rent of shs.15,000,000 per year. Due to operating efficiency of the machines, fewer staff will be required. This will reduce the wage bill from shs.70,000,000…

Assume that Baps Corporation is considering the establishment of a subsidiary in Norway. The initial investment required by the parent is $5,000,000. If the project is undertaken, Baps would terminate the project after four years. Baps' cost of capital is 13%, and the project is of the same risk as Baps' existing projects. All cash flows generated from the project will be remitted to the parent at the end of each year. Listed below are the estimated cash flows the Norwegian subsidiary will generate over the project's lifetime in Norwegian kroner (NOK): Year 1 Year 2 Year 3 Year 4 NOK10,000,000 NOK15,000,000 NOK17,000,000 NOK20,000,000 The current exchange rate of the Norwegian kroner is $.135. Baps' exchange rate forecast for the Norwegian kroner over the project's lifetime is listed below: Year 1 Year 2 Year 3 Year 4 $0.13/NOK $0.14/NOK $O.12/NOK $0.15/NOK What is the net present value and internal rate of return on the Norwegian project?

Hastings Corporation is interested in acquiring Vandell Corporation. Hastings Corporation estimates that if it acquires Vandell Corporation, synergies will cause Vandell’s free cash flows to be $2.3 million, $2.9 million, $3.4 million, and $3.79 million at Years 1 through 4, respectively, after which the free cash flows will grow at a constant 5% rate. Hastings plans to assume Vandell’s $10.29 million in debt (which has a 7.4% interest rate) and raise additional debt financing at the time of the acquisition. Hastings estimates that interest payments will be $1.6 million each year for Years 1, 2, and 3. After Year 3, a target capital structure of 30% debt will be maintained. Interest at Year 4 will be $1.431 million, after which the interest and the tax shield will grow at 5%. Vandell currently has 1.5 million shares outstanding and a target capital structure consisting of 30% debt; its current beta is 1.10 (i.e., based on its target capital structure). Vandell and Hastings each have a…