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- B с D E 1 Using the set of assumptions calculate the NPV, BCR and IRR for this project: 2 3 EBIT 4 CapEx 5 Depreciation 6 Increased working capital 7 Shares outstanding 8 Tax rate 9 WACC 10 Terminal growth rate 11 Value of debt 12 13 14 EBIT 15 Tax 16 EAT 17 Dep 18 Cap expenditures 19 Increase in WC 20 FCF 21 22 23 WACC 24 Terminal growth rate 25 Terminal value 26 27 28 Value of debt 29 Value of equity 30 Shares outstanding 31 Estimated value per share Estimated value of firm $120.0 million $25.0 million $15.0 million per year $18.0 million 4.0 million 21.00% 12.50% 4.00% $85.0 million 17.50% 21.00% 10.00% 12.50% 4.00% 1 Year 1 Year 1 Fixed over 5 years 2 F Growing at Growing at 3 G 17.50% 10.00% 4 H 5 I 6105-Principles of Financial Management-8-20202 My courses / BUSS 105-8-20202 / General / Final exam BUSS 105 section 8 If the net working capital required is 85.1 and the difference between current assets and current liabilities is 70, then what is the contingency rate? Select one: O a. 1.216 O b. 0.177 O C. All the given choices are not correct O d. 0.216 O e. 0.30 age Next page - 24-05- 2021 Jump to... pe here to search 24Match the words with the term. Question 6 options: 12345 financial need 12345 risk capital 12345 internal source 12345 external sources 12345 financing requirement 1. working capital 2. subordinated debt 3. lenders 4. short-term debt 5. retained earnings
- Q44 Cost of the capital is the minimum required rate of earnings or the cut-off rate of capital expenditure, is defined by a. William and Donaldson b. John J. Hampton c. Solomon Ezra d. James C. Van HorneE(r) D CO F E 0² Exercise #2 (Slide 23; Chapter 6; Four Elements of the Capital Allocation Line) a) Horizontal Axis: 222 b) c) Intercept: 222 d) Slope: ??? Vertical Axis: ???Q 9.50: Which of the following processes best describes depreciation? Cost allocation B Asset valuation Asset devaluation Cost accumulation O Mark for Review Confidence SUBMIT F3 F4 F5 F6 F7 F8 F9 F10 A CO %24
- 9. Determining the optimal capital structure Aa Aa Understanding the optimal capital structure Review this situation: Transworld Consortium Corp. is trying to identify its optimal capital structure. Transworld Consortium Corp. has gathered the following financial information to help with the analysis. Debt Ratio Equity Ratio rd rs WACC 30% 70% 6.02% 9.40% 9.71% 40% 60% 6.75% 9.750% 9.55% 50% 50% 7.15% 10.60% 10.02% 60% 40% 7.55% 11.30% 10.78% 70% 30% 8.24% 12.80% 11.45% Which capital structure shown in the preceding table is Transworld Consortium Corp.'s optimal capital structure? Debt ratio = 70%; equity ratio = 30% Debt ratio = 40%; equity ratio = 60% Debt ratio 60%; equity ratio = 40% Debt ratio = 50%; equity ratio = 50% Debt ratio = 30%; equity ratio = 70% Consider this case: Globex Corp. currently has a capital structure consisting of 40% debt and 60% equity. However, Globex Corp.'s CFO has suggested that the firm increase its debt ratio to 50%. The current risk-free rate is 3.5%,…QUESTION 11 1. Which market variable is determined within the capital markets? c a. Property value C b. Market rent c. None of the answer choices d. Net operating incomeQ 5. [A] From the following data, indicate the effect that the changes in the relevant items will have on the working capital: Particulars Jan 1, Dec 31, Particulars Jan 1, Dec 31, 2020 2020 2020 2020 Land 44000 68000 Goodwill 13000 13000 Debentures 20000 25000 Prepaid Expenses 70 300 Stock 30000 28000 Bills Payable 1500 900 Machinery 180000 180000 Bills Receivable 3000 2000 Trade Creditors 8000 5320 Mortgaged Loan 50000 40000 Cash 29000 9000 Equity Share Capital 100000 120000 Long Term Investments 10000 6250 Preference Share 120000 75000 Сapital Accrued Expenses 350 160 Trade Debtors 19000 20000 Short-term Debt 3220 5170 Your answer must indicate the overall and individual effect of changes in relevant items. [B] A Company's reported current year profit is Rs. 70000 after incorporating the following: Particulars Amount Particulars Amount Loss on Sale of Equipment 9000 Gain from sale of Assets 40000 Premium Redemption of 1500 Provision for Tax 22000 on Debentures Discount on issue of…
- Q11 Capital structure is defined as “the long term sources of fund employed in a business enterprise” by a. R.H. Wessel b. James C Van Horne c. Gerestenbeg d. Presana ChandraQ 2 a) Discuss the following terms The spontaneous sources of short-term financing Capital asset pricing modelChapter 9 Homework Questions 1.What do we mean by financial structure? 2. What accounts in the statement of financial position are taken into consideration to calculate the cost of financing? 3. What is the meaning of economic value added (EVA)? What does it measure? Why is it important? 4. What is the purpose of calculating the cost of capital? 5. Differentiate between debt financing and common share financi