Projected Year: 1 2 3 4 5 6 7Net Capital Spending 1.80 1.90 2.20 2.16 2.30 3.00 3.25Depreciation 0.50 0.75 0.90 0.95 1.10 1.25 1.50EBIT 2.50 3.50 4.10 4.50 5.10 6.00 7.10Change in NWC 0.20 0.25 0.30 0.40 0.60 0.70 1.10For ABC Co., the projected cash flow components (in Smil) during theprojection period are as stated. Marginal tax rate is 35% and WACC is10%. EV/EBITDA Exit multiple is 9x. Using mid-year conventionmethod:Based on the assumptions above, what is the Enterprise Value for ABC CoG?

To calculate the Enterprise Value (EV) for ABC Co. based on the provided data, we need to follow…

Answered: Projected Year: 1 2 3 4 5 6 7 Net…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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7
Internal Rate of Return A project is estimated to cost $244,296 and provide annual net cash flows of $58,000 for five years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above.fill in the blank 1 %
Internal Rate of Return A project is estimated to cost $350,265 and provide annual net cash flows of $57,000 for 10 years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 1 0.909 0.893 0.870 0.833 1.833 1.690 1.528 1.736 1.626 2.673 3 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 4.355 4.111 3.784 3.326 6 4.917 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above. %
Activity 7.5. Remediation You are considering a project with an initial cost of P7.8M. Find the payback period and the NPV for this project if the cash inflows are P1.1M, P1.64M, P3.8M, and P4.5Ma year over tenext four years, respectively. Cost of Capital is 6.5%.
explain the image provided give recommendation
a) b) Consider the following two projects: Project A B Year 0 Cash Flow -100 -73 17.3% C. d. Year 1 Cash Flow 40 30 a. 30 percent. b. 20 percent. 0 percent. 10 percent. Year 2 Cash Flow What is the incremental IRR of Project B over Project A? a. 12.6% b. 23.3% C. 1.7% d. 50 30 Year 3 Cash Flow 60 30 Year 4 Cash Flow N/A 30 Discount Rate If the standard deviation of returns on the market is 20 percent, and the beta of a well- diversified portfolio is 1.5, calculate the standard deviation of this portfolio. .15 .15
Spreadsheet Link What is the IRR of the following project?Cash FlowYear0 -32,0001. 9,0002. 10,0003. 15,0004. 7,800 1). 10.8% 2). 11.2% 3). 11.7%4). 12.0% 5). 12.3%
Year Cashflow Interest rate 11% 0 (294,000) 1 106,448 2 97,628 3 88,808 4 127,518 Calculate the Project's NPV, IRR, MIRR, and payback. Do these indicators suggest that the project should be accepted? Explain
>Unit-of-production method This method amortizes the costs of oil and gas industry activities and is dependent on the accounting method chosen by the owner of the assets. The following general formula shows the concept of unit-of- production amortization: [unamortized costs at end of period]+|production for period [Amortization for period]=! reserves at the beginning of period
which has a better IRR Project 1 Year Cashflows Discount Rate 10% 0 $ (750,000.00) 1 $ 250,000.00 2 $ 300,000.00 3 $ 350,000.00 4 $ 200,000.00 5 $ 100,000.00 Project 2 Year Cashflows Discount Rate 10% 0 $ (1,000,000.00) 1 $ 200,000.00 2 $ 300,000.00 3 $ 400,000.00 4 $ 500,000.00 5 $ 700,000.00
Clearcast Communications Inc. is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated operating income, and net cash flow for each proposal are as follows: Operating Income Net Cash Flow Investment Year Proposal A: $450,000 $ 30,000 1 $120,000 2 30,000 120,000 3 20,000 110,000 4 10,000 100,000 (30,000) $ 60,000 $ 60,000 40,000 60,000 $510,000 $100,000 Proposal B: $200,000 1 80,000 3 20,000 60,000 4 (10,000) 30,000 (20.000) $ 90,000 20.000 $290,000 (Continued)
13

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