Blooper Industries must replace its magnoosium purification system. Quick & Dirty Systems sells a relatively cheap purification system for $10 million. The system will last 5 years. Do-It-Right sells a sturdier but more expensive system for $12 million, it will last for 8years. Both systems entail $1 million in operating costs; both will be depreciated in an asset class that has a CCA rate of 30%; neither will have any salvage value at the end of its life. The firm's tax rate is 35%, and the discount rate is 12%. Which system should blooper install? The answer should be in excel with details, please?

Q: You are trying to decide whether or not to extend credit to a particular customer. Your variable…

A: Given:Variable cost = $10 Per unitSelling price = $14 Per unitNumber of units = 100 unitsChance of…

Q: Six mutually exclusive projects A, B, C, D, E and F are to be evaluated and selected by a project…

A: The internal rate of return(IRR) is used to determine the investment's profitability. It is a…

Q: What is the variance of a portfolio consisting of $6,500 in stock A and $4,000in stock B? Returns if…

A: The portfolio variance considers both the individual variability (variances) of each asset and the…

Q: Bronco Corp is considering a new investment. The Investment will cost the firm $35,000 now and will…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: A firm plans to grow at an annual rate of at least 16%. Its return on equity is 24%. Suppose the…

A: Dividend payout ratio is calculated as follows:-Dividend payout ratio = 1-Retention ratio

Q: Emily is holding shares of stock A with market value of $100,000 that includes unrealized capital…

A: Given data:Emily holds shares of stock A with a market value of $100,000, including unrealized…

Q: Suppose you sell 21 of the May corn futures at the high price of the day. You close your position…

A: A financial agreement for the purchase or sale of an asset at a fixed future time and price is known…

Q: 2) If Bob deposits $5000 at the end of each year for 14 years in an account paying 6% inter…

A: C=$5000i=0.06n=14

Q: XYZ's stock price and dividend history are as follows: Dividend Paid at Year-End $4 4 4 Year 2018…

A: YearBeginning-of-Year PriceDividend paid at year endAction2018$102$4Buy 3 shares2019$122$4Buy 2…

Q: Compute the total and annual return on the following investment. Five years after paying $2900 for…

A: Returns refer to the income earned through the investment by means of capital appreciation or the…

Q: An accountant for XYZ Widgets Inc is examining the company’s cash conversion cycle for 2018. For the…

A: Cash conversion cycle indicates that how much is the period required to recover the cash money from…

Q: Common Equity Tier 1 Risk-Based Ratio Zone 1. Well capitalized 6.5% or above and 8% or above 2.…

A: CET 1 capital ratio = CET 1/risk-weighted assets= ($50 million/ $2,017.6)*100= 2.48% The bank's CET…

Q: called in 6 years for 113% of par value. What is your expected quoted annual rate of return if you…

A: Bond valuation entails determining the present value of a bond's future cash flows, which include…

Q: 17) General Motors has a weighted average cost of capital of 7%. GM is considering investing in a…

A: Net Present value (NPV) = Present value of Future cash flow - Initial investmentPresent value =…

Q: Consider the following premerger information about Firm X and Firm Y: Total earnings Shares…

A: Since since no debt to the firms,Total assets of a firm = Number of shares * book value Existing…

Q: A loan in the amount of 300,000 is repaid with 20 end of year payments containing equal principal.…

A: The outstanding balance of a loan represents the remaining amount of money that a borrower still…

Q: Weatherall Enterprises has no debt or preferred stock-it is an all-equity firm-and has a beta of…

A: The accept/reject decision on a capital budgeting project should be based on the project's expected…

Q: Q2. (8 points) Five annual returns are listed in Year 1 -20% 2 3 17% 18% 4 -30% 5 40% If you…

A: The annual return is the return on an investment generated over a year and calculated as a…

Q: 18%, and the tax rate is 21% what is the company's weighted average cost of capital (WACC)?

A: The weighted average cost of capital determines the cost of capital by accounting for the relative…

Q: Velcro Saddles is contemplating the acquisition of Skiers' Airbags Incorporated The values of the…

A: Net present value refers to the method of capital budgeting used for estimating the viability of the…

Q: What is the value of Milton Industries with leverage? a) 85, 973,333 b) 88, 573, 333 c) 89,646, 444…

A: The value of the company is the total of all its marketable assets. The Modigliani-Miller proportion…

Q: Which of the following actions of the manager of a borrowing firm might cause a moral hazard problem…

A: Moral hazard refers to a situation in which one party is able to take risks because it does not have…

Q: The management of East Manufacturing needs a new high tech sorting machine and has two different…

A: Payback period and net present values are important capital budgeting tools. These tools are used to…

Q: Required information [The following information applies to the questions displayed below.] Metro Car…

A: YearAnnual Net After-Tax Cash Flow0-$345,0001$162,0002$141,0003$120,0004$99,0005$78,000

Q: Bonds are issued to finance major expansions or to refinance existing debt. A True B False

A: Bonds are commonly issued to raise capital for various purposes like finance major expansions or…

Q: Crow Academy leadership wants to know its WACC given its current capital structure. The capital…

A: The objective of the question is to calculate the Weighted Average Cost of Capital (WACC) for Crow…

Q: How do you find the maximum profit and loss percentage using these graphs? Long put Payoff Kluss st…

A: A put option is a financial instrument in which the holder is granted the ability, but not the…

Q: Consider the relative costs of a timber pedestrian bridge and a steel one; their initial capital…

A: LCM method uses PW of Timber Bridge alternative = -500,000 - 500,000*(P/F, 8%, 15) - 30,000*(P/A,…

Q: Find the arithmetic average, variance, and standard deviation for X and Y. What would the return be…

A: PORTFOLIO RETURN:Portfolio return refers to the overall gain or loss on an investment portfolio over…

Q: To participate in a shareholders' meeting, a shareholder must present a proxy. O True 3000 O False

A: In meeting of shareholders, if a shareholder is not able to attend meeting himself, he can appoint a…

Q: There is much speculation on how the current foreclosure market will evolve due to a variety of…

A: This essay delves into the potential transformations, exploring the intricate connections between…

Q: (T/F) The covariance between two assets ranges between -1.0 and 1.0. (T/F) If two risk) then their…

A: Covariance in finance is a statistical metric used to quantify the degree to which the returns of…

Q: Ranger Corporation has decided to invest in renewable energy sources to meet part of its energy…

A: Net present value is capital budgeting technique used for making investment decisions.It is…

Q: E. 12.11% 2. North Around, Inc. stock is expected to return 22 percent in a boom, 13 percent in a…

A: Expected rate is a weighted rate of return depending on the different scenarios of the economy and…

Q: Liability Driven Investing (LDI) Strategies (Continued) Example: Market value of assets is $160…

A: “Since you have posted a question with multiple sub-parts, we will provide the solution only to the…

Q: A declining trend in the capital outlay ratio could be an indicator of deferred replacement of…

A: Capital Outlay Ratio:/The capital outlay ratio is a financial metric used to assess the efficiency…

Q: Pelican Feeders Ltd. has an annual return of 15.27%. The risk-free asset returns 5.25%, and the S&P…

A: The objective of the question is to calculate the beta of the stock of Pelican Feeders Ltd. Beta is…

Q: Suppose you bought a bond last year for $12,000 with an annual coupon rate of 4%. This year,…

A: Present value of the Perpetual cash flows = Annual perpetual cash flow / Market rate of interestNote…

Q: The Bruin's Den Outdoor Gear is considering a new 6-year project to produce a new tent line. The…

A: NPV net present value refers to the capital budgeting techniques used to evaluate the profitability…

Q: You want to create a portfolio equally as risky as the market, and you have $1,200,000 to invest.…

A: Beta of portfolio is computed as follows:-Bp= whereBp= beta of portfolioBi = beta of each assetWi=…

Q: The Midfield Co. just issued a dividend of $1.36 per share on its common stock. The company is…

A: According to Gordon's growth model,Po= wherePo= price of stockDo= dividend paidg= growth ratek= cost…

Q: A bank made a $10,000 four-year auto loan paying 7 percent interest annually, The YTM for the loan…

A: Macaulay Duration:The Macaulay Duration is a crucial tool for investors to assess the interest rate…

Q: The Bruin's Den Outdoor Gear is considering a new 7-year project to produce a new tent line. The…

A: Variables in the question:Equipment cost=$1.83 millionN=7 yearsScrap value=10% of initial costNo. of…

Q: Canadian Air would like to sell 3825899 shares of stock using Dutch auction underwriting. The bids…

A: Bidder A = 650,000 Shares at $31 (3,825,899 - 650,000) = 3,175,899 Shares remainingBidder B =…

Q: Suppose that a 1 percent increase in the (annual) interest rate leads to a 3.9 percent drop in the…

A: The implied effective duration gap is a financial metric used by banks and financial institutions to…

Q: The following is part of the computer output from a regression of monthly returns on Waterworks…

A: The rate of return on an investment with no chance of financial loss is called to as the "risk-free…

Q: If Promus could make order amounts after realizing demand, what would the expected value of this…

A: The objective of this question is to calculate the expected value of information for Promus if it…

Q: My broker just called and offered to sell me a stock with an expected return of 30% annually. If the…

A: Capital Asset Pricing Model (CAPM) is used to estimate the rate of return investors would expect…

Q: Present value of an annuity Determine the present value of $200,000 to be received at the end of…

A: The present value is the worth of cash flows at the present time computed on the basis of a given…