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Answer the following questions : A. Which alternative is the best? B. Calculate the point of indifference between alternatives 1 and 2 above. C. Create a drawing/graph showing the indifference points between alternatives 1 and 2. (Make sure the intercept between the X and Y axes is correct).

Answer the following questions : A. Which alternative is the best? B. Calculate the point of indifference between alternatives 1 and 2 above. C. Create a drawing/graph showing the indifference points between alternatives 1 and 2. (Make sure the intercept between the X and Y axes is correct).

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Please Answer My Questions Financial Management... My question number 1... Please Answer 3 Subparts.... Because I know the tutor can max Answer 3 sub parts.... And explaining soal in the first page and the next page in image is A question sub parts.. ~ Thank u

Answer the following questions : A. Which alternative is the best? B. Calculate the point of indifference between alternatives 1 and 2 above. C. Create a drawing/graph showing the indifference points between alternatives 1 and 2. (Make sure the intercept between the X and Y axes is correct).
Transcribed Image Text:Answer the following questions : A. Which alternative is the best? B. Calculate the point of indifference between alternatives 1 and 2 above. C. Create a drawing/graph showing the indifference points between alternatives 1 and 2. (Make sure the intercept between the X and Y axes is correct).
1. ABC Ltd., an apparel company, currently has the following capital Structure: Debt of Rp100 million with an interest rate of 10% AND own capital (equity) of Rp200 million which is divided into 2,000 shares of common stock. Currently, the company plans to increase its production capacity, which requires Rp 100 million, which will be met with several alternative funding. - Fully funded by ordinary shares with a par value of IDR 100,000/share. - Fully funded by preferred stock with 10% dividend. 3. Some (75%) are financed by ordinary shares with a par value of Rp. 100,000/share and some (25%) are financed by debt with an interest rate of 10%. The expected EBIT of the expansion project is IDR 100 million, and the tax rate is 25%.
Transcribed Image Text:1. ABC Ltd., an apparel company, currently has the following capital Structure: Debt of Rp100 million with an interest rate of 10% AND own capital (equity) of Rp200 million which is divided into 2,000 shares of common stock. Currently, the company plans to increase its production capacity, which requires Rp 100 million, which will be met with several alternative funding. - Fully funded by ordinary shares with a par value of IDR 100,000/share. - Fully funded by preferred stock with 10% dividend. 3. Some (75%) are financed by ordinary shares with a par value of Rp. 100,000/share and some (25%) are financed by debt with an interest rate of 10%. The expected EBIT of the expansion project is IDR 100 million, and the tax rate is 25%.
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