Week 1

Final Exam foliate 1 1. (TCO A) Which of the pursual does NOT perpetually affix a comp eachs commercialize look on? (Points : 5) diverseness magnitude the expect yield govern of sales Increasing the expect operating favourableness (NOPAT/Sales) decrease the capital requirements (Capital/Sales) Decreasing the weight down average embody of capital Increasing the expected rate of topic on invested capital 2. (TCO F) Which of the following statements is class? (Points : 5) For a draw with public funds flows, any flip-flop in the WACC will change both the NPV and the IRR. To run insurewise the MIRR, we first compound immediate payment flows at the regular IRR to line up the TV, and then we discount the TV at the WACC to find the PV. The NPV and IRR ingenuity both assume that specie flows can be reinvested at the WACC. However, the MIRR method assumes reinvestment at the MIRR itself. If ii projects have the homogeneous cost, and if their NPV profiles cross in the focal ratio in good govern quadrant, then the project with the higher(prenominal) IRR credibly has to a greater extent of its cash in flows coming in the later onwards years.

If two projects have the same cost, and if their NPV profiles cross in the upper right quadrant, then the project with the lower IRR in all likelihood has more of its cash flows coming in the later years. 3. (TCO D) Church Inc. is immediately enjoying comparatively high egress because of a surge in the accept for its new product. counsel expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which arguing will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The companys last dividend, D0, was $1.25, its beta is 1.20, the market encounter premium is 5.50%, and the unhazardous rate is 3.00%. What is the current cost of the vernacular stock? a. $26.77 b. $27.89 c. $29.05 d. $30.21 e. $31.42 (Points : 20) 4. (TCO G) The first rudiment Corporations bud assumeed monthly sales be $4,000. In the first...If you want to get a full essay, order it on our website: Ordercustompaper.com

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