Verano Inc. has two business divisions- a software product line and a waste water clean-up product line. The software business has a cost of equity capital of 10% and the waste water clean-up business has a cost of equity capital of 5%. Verano has 50% of its revenue from software and the rest from the waste water business. Verano is considering a purchase of another company in the waste water business using equity financing. What is the appropriate cost of capital to evaluate the business? OA. 7.5% OB. 7% OC. 5% OD. 10%

During the last few years, Harry Davis Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has decided to look seriously at a major expansion program proposed by the marketing department. Assume that you are an assistant to Leigh Jones, the financial vice president. Your first task is to estimate Harry Davis’ cost of capital. Jones has provided you with the following data, which she believes may be relevant to your task: •The firm’s tax rate is 35%. •The current price of Harry Davis’ 12.5% coupon, semiannual payment, noncallable bonds with 15 years remaining to maturity is $1105.67. Harry Davis does not use short-term interest-bearing debt on a permanent basis. New bonds would be privately placed with no flotation cost. •The current price of the firm’s 10%, $100 par value, quarterly dividend, perpetual preferred stock is $114.27. Harry Davis would incur flotation costs…

You are considering adding a microbrewery onton one of your firm's exisiting restaurants.  this will entail an increase inventory of $8700, an increase in accounts payables of $23.00, and an increase in property, plant, and equipment of $48,000.  All other accounts will remain unchanged.  The change in net working capital results from the addtion of the microbewery is?

You need to solve this exercise using Excel functions. (Please show work on excel) ABC Inc. plans to invest in new equipment. It will purchase the new equipment for $130,000 and sell its old version, which is fully depreciated, for $25,000. The new equipment has a 10-year useful life and will save $45,000 a year in expenses before tax. The opportunity cost of capital is 11%, and the firm’s tax rate is 21%. What is the NPV of this investment if ABC can benefit from bonus depreciation?