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FIN 419 Week 4 Individual My FinanceLab (New)
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P9-7
Net present value.
Quark Industries has a project with the following projected cash flows:
a.
Using a discount rate of 9%
for this project and the NPV model, determine whether the company should accept or
reject this project.
b.
Should the company accept or reject it using a discount rate of 17%?
c.
Should the company accept or reject it using a discount rate of 18%?
P9-8 (similar to)
Net present value. Lepton Industries has a project with the following projected cash
flows:
Initial cost: $470,000
Cash flow year one: $121,000
Cash flow year two: $260,000
Cash flow year three: $181,000
Cash flow year four: $121,000
a.
Using a discount rate of 9% for this project and the NPV model, determine
whether the company should accept or reject this project.
b.
Should the company accept or reject it using a discount rate of 14%?
c.
Should the company accept or reject it using a discount rate of 21%?
P16-5 (similar to)
Break-even EBIT (with and without taxes).
Alpha Company is looking at two
different capital structures, one an all-equity firm and the other a levered firm with $4.8
million of debt financing at 7% interest. The all-equity firm will have a value of $8
million and 400,000 shares outstanding. The levered firm will have 160,000 160,000
shares outstanding.