Question 20? Use the table for the question(s) below.FCF Forecast ($ million)Year134Sales240270290310325.5Growth vs. Prior YearEBIT (10% of Sales)Less: Income Tax (37%)Less: Increase in NWC (12% of Change in Sales)Free Cash Flow12.5%7.4%29.006.9%31.0011.475.0%32.5527.00(9.99)3.613.4110.7312.442.415.871.8618.652.417.13Banco Industries expect sales to grow at a rapid rate over the next three years, but settle to an industry growth rate of 7% in year 4. The spreadsheet above shows a simplified pro forma for BancoIndustries. If Banco industries has a weighted average cost of capital of 9%. $40 million in cash, $60 million in debt, and 18 million shares outstanding, which of the following is the best estimate ofBanco's stock price at the start of year 1?....O A. $36.95B. $41.05C. $73.89O D. $20.53O 0 O C

The stock price at the start of year 1 can be calculated as follows: Calculate the terminal value…

Banco Industries expect sales to grow at a rapid rate over the next three years, but settle to án industry growth Fate of 79% || Industries. If Banco industries has a weighted average cost of capital of 9%, $40 million in cash, $60 million in debt, and 18 million shares outstanding, which of the following is the best estimate of Banco's stock price at the start of year 1?

Banco Industries expect sales to grow at a rapid rate over the next three years, but settle to án industry growth Fate of 79% || Industries. If Banco industries has a weighted average cost of capital of 9%, $40 million in cash, $60 million in debt, and 18 million shares outstanding, which of the following is the best estimate of Banco's stock price at the start of year 1?

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

Problem 1PS

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Consider the following cash flow: Year Cash Flow -$ 29,800 13,900 15,000 11,400 1 2 3 a). What is the profitability index for the cash flows if the relevant discount rate is 9 percent? b) what is the profitability index if the discount rate is 14 percent? c) What is the profitability index if the discount rate is 21 percent?
Consider the following cash flows: Year Cash Flow -$28,700 15,000 13,900 10,300 3 a. What is the profitability index for the cash flows if the relevant discount rate is 12 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b. What is the profitability index if the discount rate is 17 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) c. What is the profitability index if the discount rate is 25 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) a. Profitability index b. Profitability index c. Profitability index O123
Year Cash Flow ($) 0 17,700 1 10,000 2 8,900 3 5,400 What is the profitability index for the set of cash flows if the relevant discount rate is 11 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
Year Cash Flow 0 (8,100.00) 1 3,600.00 2 3,900.00 3 2,800.00 a. What is the profitability index for the cash flows if the relevant discount rate is 9 percent? b. What is the profitability index for the cash flows if the relevant discount rate is 14 percent? c. What is the profitability index for the cash flows if the relevant discount rate is 24 percent?
n.com Connect (i) Consider the following cash flows: Year Cash Flow 0 -$29,600 1 14,100 2 14,800 3 11,200 a. What is the profitability index for the cash flows if the relevant discount rate is 11 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 b. What is the profitability index if the discount rate is 16 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. What is the profitability index if the discount rate is 23 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. a. Profitability index b. Profitability index c. Profitability index.
Using the forecast template approach, forecast the 2021 Free Cash Flow (FCF) for Australian Vintage Limited given the information below. 2020 Sales Revenue = 265,000 2020 Net Operating Assets (NOA) = 435,000 2021 Forecast Sales Revenue will grow by 1.0% 2021 Forecast Asset Turnover Ratio (ATO) = 0.60 !! 2021 Forecast Profit Margin (PM) = 6% 2021 Forecast Other Comprehensive Income (OCI) = 0 Answer to 2 decimal places.
Assuming a 1-year, money market account investment at 5.315.31 percent (APY), a 3.413.41 percent inflation rate, a 2828 percent marginal tax bracket, and a constant $70 comma 00070,000 balance, calculate the after-tax rate of return, the real rate of return, and the total monetary return. What are the implications of this result for cash management decisions? Question content area bottom Part 1 Assuming a 1-year, money market account investment at 5.315.31% (APY), a 2828% marginal tax bracket, and a constant $ 70 comma 000$70,000 balance, the after-tax rate of return is enter your response here%. (Round to two decimal places.) Part 2 Assuming a 1-year, money market account investment at 5.315.31% (APY), a 2828% marginal tax bracket, and a constant $ 70 comma 000$70,000 balance, the after-tax monetary return is $enter your response here. (Round to the nearest dollar.) Part 3 Given an after-tax return of 3.823.82% and an inflation rate of…
The net present value (NPV) the cash flows from T=0 to T=3 is $2278 when using a 10% discount rate. The missing cash flow from year 2 is closest to ________. T0=-28,000 T1=10,000 T2=??? T3=15,000.
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Assuming a 1-year, money market account investment at 2.282.28 percent (APY), a 1.391.39 percent inflation rate, a 2525 percent marginal tax bracket, and a constant $50 comma 00050,000 balance, calculate the after-tax rate of return, the real rate of return, and the total monetary return. What are the implications of this result for cash management decisions? Question content area bottom Part 1 Assuming a 1-year, money market account investment at 2.282.28% (APY), a 2525% marginal tax bracket, and a constant $ 50 comma 000$50,000 balance, the after-tax rate of return is 1.711.71%. (Round to two decimal places.) Part 2 Assuming a 1-year, money market account investment at 2.282.28% (APY), a 2525% marginal tax bracket, and a constant $ 50 comma 000$50,000 balance, the after-tax monetary return is $855855. (Round to the nearest dollar.) Part 3 Given an after-tax return of 1.711.71% and an inflation rate of 1.391.39%, the after-tax real rate…
Assuming a 1-year, money market account investment at 2.282.28 percent (APY), a 1.391.39 percent inflation rate, a 2525 percent marginal tax bracket, and a constant $50 comma 00050,000 balance, calculate the after-tax rate of return, the real rate of return, and the total monetary return. What are the implications of this result for cash management decisions? Question content area bottom Part 1 Assuming a 1-year, money market account investment at 2.282.28% (APY), a 2525% marginal tax bracket, and a constant $ 50 comma 000$50,000 balance, the after-tax rate of return is 1.711.71%. (Round to two decimal places.) Part 2 Assuming a 1-year, money market account investment at 2.282.28% (APY), a 2525% marginal tax bracket, and a constant $ 50 comma 000$50,000 balance, the after-tax monetary return is $855855. (Round to the nearest dollar.) Part 3 Given an after-tax return of 1.711.71% and an inflation rate of 1.391.39%, the after-tax real rate…
Assuming a 1-year, money market account investment at 2.282.28 percent (APY), a 1.391.39 percent inflation rate, a 2525 percent marginal tax bracket, and a constant $50 comma 00050,000 balance, calculate the after-tax rate of return, the real rate of return, and the total monetary return. What are the implications of this result for cash management decisions? Question content area bottom Part 1 Assuming a 1-year, money market account investment at 2.282.28% (APY), a 2525% marginal tax bracket, and a constant $ 50 comma 000$50,000 balance, the after-tax rate of return is 1.711.71%. (Round to two decimal places.) Part 2 Assuming a 1-year, money market account investment at 2.282.28% (APY), a 2525% marginal tax bracket, and a constant $ 50 comma 000$50,000 balance, the after-tax monetary return is $855855. (Round to the nearest dollar.) Part 3 Given an after-tax return of 1.711.71% and an inflation rate of 1.391.39%, the after-tax real rate…

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