Arrow Electronics is cons not repeatable. Project S has an initial cost of $1 million and cash wears, while Project L has an initial cost of $2 million and cash inflows of $720,000 for 4 years. The CEO wants to use the IRR criterion, while the CFO favors the NPV method, using a WACC 16.67%. u were hired to advise the firm on the best procedure. If the wrong decision criterion is used, w much potential value would the firm lose? That is, what is the difference between the NPVS these two projects? -answer should be between 112000 and 202000, rounded to even dollars (although decimal

In this assignment, you have been brought in to assess whether Nucor should be the first adopter of a new technology. This requires a $340 million investment in a commercially unproven technology. If successful, Nucor can expand into the flat sheet segment that was previously a segment where only the large integrated steelmakers competed. This assignment requires that you combine qualitative information (e.g., industry and firm insights) with quantitative analysis in Excel (discounted cash flow analysis). After you read the case, answer both questions: background analysis and cash flow analysis. For cash flow analysis, you need to do calculations using Excel file attached in the assignment on Blackboard. Once you finished your calculations using Excel file, you can answer your second part of the assignment. Background Analysis (20 points) Industry: Of the three groups of steelmakers, what are some of the differences between integrated steelmakers and minimill steelmakers? Nucor: What…

Miles Ltd., a manufacturer of various car products wants to estimate its funding requirements for the coming financial year. In the recent past, the company had spare production capacity, but increased sales has raised suspicions amongst management that investment in new capacity may be required soon. In the current financial year the company achieved sales of R200 million on assets worth R2000 million and liabilities of R500 m. It's resulting net profit margin was 10% with no dividend being paid I as the company ts in a high growth phase. All assets and liabilities are considered spontaneous and increase in line with sales. It is expected tha sales will grow by 20% in the coming year. Assets are however only utilized up to 90% of total capacity and the spare capacity can be used first before new capacity is installed. a. R36 million b. R76 million C. R120 million d. R240 million I

Brandt Enterprises is considering a new project that has a cost of $1,000,000, and the CFO set up the following simple decision tree to show its three most likely scenarios. The firm could arrange with its work force and suppliers to cease operations at the end of Year 1 should it choose to do so, but to obtain this abandonment option, it would have to make a payment to those parties. How much is the option to abandon worth to the firm? WACC-11.5% Prob. -20% Prob. -60% Prob. -20% 1-0 -$1,000 A $55.08 B) $57.98 C) $61.03 D) $64.08 E $67.29 Dollars in Thousands 1-2 $800.0 $800.0 $520.0 $520.0 -$200.0 -$200.0 -$200,0 $800.0 $520.0 NPV This State $938.10 $259.76 -$1,484.52 Prob. x NPV $187.62 $155.86 -$296.90 Exp. NPV-$46.57

J&R Construction Company is an international conglomerate with a real estate division that owns the right to erect an office building on a parcel of land in downtown Sacramento over the next year. This building would cost $40 million to construct. Due to low demand for office space in the downtown area, such a building is worth approximately $38 million today. If demand increases, the building would be worth $42.3 million a year from today. If demand decreases, the same office building would be worth only $35 million in a year. The company can borrow and lend at the risk-free annual effective rate of 5.5 percent. A local competitor in the real estate business has recently offered $821,000 for the right to build an office building on the land. What is the value of the office building today? Use the two-state model to value the real option. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.)…

An officer for a large construction company is feeling nervous. The anxietyis caused by a new excavator just released onto the market. The newexcavator makes the one purchased by the company a year ago obsolete.As a result, the market value for the company’s excavator has droppedsignificantly, from $600,000 a year ago to $50,000 now. In ten years, itwould be worth only $3,000. The new excavator costs only $950,000 andwould increase operating revenues by $90,000 annually. The newequipment has a ten-year life and expected salvage value of $175,000. Thetax rate is 35%, the CCA rate, 25% for both excavators, and the requiredrate of return for the company is 14%. What is the NPV of the newexcavator? (Negative answer should be indicated by a minus sign. Do notround your intermediate calculations. Round the final answer to 2decimal places. Omit $ sign in your response.)NPV           $

Req C was not answered.