Use the information contained in the figure below, which contains the NPV profile for Project A (solid curved line) and for Project X (dashed curved line) to answer the following question (two parts). NPV Project A Project X $0 Cost of Capital 0% 22% 30% 12% Choose the most accurate statement: If these projects are mutually exclusive, which project should be chosen by the CEO of the firm if the CEO's primary objective is to maximize shareholder value? Assume the opportunity cost of capital is 10% for both projects. O A. The CEO should select Project A O B. The CEO should select both Project A and Project X. O C. The CEO should not select either project. OD. The CEO should select Project X OE. There is not enough information provided to determine which project should be accepted. Next

Suppose you are considering a project has an initial cost of $750 that has an ongoing benefit of $275. Further, there is an ongoing cost that is equal to $90, which increases by $10 each year. Assume the project lasts 6 years. If the appropriate discount rate is 5.5%. Calculate: a) the Net Present Value = $ 57.07 b) the Benefit Cost Ratio = c) should the project be accepted or rejected? Explain your answer using the information from part a) and b). Answer = (accept/reject) Provide your answers to two decimal places. Do not include any commas (,) "$" or

a. A project costs $10 up front and has net benefits of $15 with probability 0.8 at the end of the second year and otherwise returns nothing. The discount rate is 0.035. What is the NPV? b. At what probability of returning $15 after year 2 would the ENPV be 0?

You are an investment analyst for De Caul’s Investments Inc., an independent financial consulting firm.  Your latest assignment is to provide an independent assessment of RBL.  RBL is a Caribbean-based company that manufactures building products and provides services for the construction and engineering sectors.  The company has several divisions which operate as separate entities. The case study analysis consists of a core section, The Markowitz Portfolio Theory and you will have to either conduct research or perform calculations.  The assessment must be completed within five days because a meeting has been scheduled with the client to discuss your findings. Saving cash in the bank is not as attractive as it was in the past, and RBL is looking to invest some of its surplus cash.  In a meeting with senior managers in the company, you mention the Modern Portfolio Theory which was pioneered by Markowitz.   Required: Explain to the senior manager, The purpose of the Markowitz Portfolio…

Question 6. You are asked to evaluate a mining project with costs in the developmental stage followed by benefits in the production stage and ending with significant costs at the end of the study period for reclamation of the land to its original state. You have determined that the project has two positive IRRs. a. Summarize a strategy for modifying the CB C cash flow pattern into a simpler CB cash flow pattern with just one IRR solution and a straightforward decision rule. b. Ilustrate your strategy with the following example: Capital cost at t-0 is $70 million; Constant benefits of $40 million in years 1-5; Year 6 reclamation cost of S140 million; Appropriate MARR = 20%. Set up the cash flow diagram, but do not solve for IRR.

Suppose that SolarHeat Co., a renewable energy startup, currently has earnings of $10 per share and that Eleanor anticipates the earnings per share to grow by 6 percent per year. Using a mean industry PE ratio of 12 and the expected annual growth rate on the firm's existing earnings, the estimated stock price in three years is: $138.63 $142.92 O $147.21 $154.35 Suppose SolarHeat Co. is expected to pay a dividend of $3 per share over the next three years, that Eleanor's required rate of return is 16 percent, and that she plans to sell the stock at the end of the three-year time period. Under these circumstances, using the adjusted dividend discount model, the value of the stock today is: O $88.47 per share $98.30 per share $101.25 per share $105.18 per share

Ben is a retired budget auditor who is currently looking for a new investment opportunity. He is considering two investments: Calzone Zone, a small restaurant specialising in calzone, and Icetown, a skating and curling rink. The projected cash flows of the two investments are shown below. Ben can only choose one projects, so he asks for your help and advice in reaching a decision on which investment to accept. He tells you he requires a 5% rate of return on his investment. Calzone Icetown Zone Cash flows £000 £000 Initial investment (885) 150 (300) 215 Cash flows year 1 Cash flows year 2 Cash flows year 3 Cash flows year 4 Cash flows year 5 195 215 200 230 265 215 215 (585) Assume the initial investment arises at the start of the first year of the project and all the subsequent cash flows occur at the end of the year. Question A. What are the economic factors reflected in the required rate of return? Discuss the likely effects of the economic shock brought by the COVID-19 pandemic on…