Please provide answer this question Question:Bauer Brewing Co. has the following data(dollars in thousands). If it follows the residualdividend model, what will its dividend payoutratio be?Capital budget $15,000% Debt55%Net income (NI) $9,000a. 25.00%b. 30.00%c. 45.00%d. 60.00%e. 75.00%Capital Budget:Capital budget can be explained as the amountof money that a company is planning to incur onits capital assets. A company can finance itscapital budget internally as well as throughexternal sources.

Equity = Capital Budget*(1-Debt%)Equity = 15,000*(1-55%)Equity = $6,750 Residual Earnings = Net…

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Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 2P

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A firm with the following investment opportunities has a capital budget of $10,000. According to the net present value technique, which investments should the firm make if the firm's cost of capital is 10%? Investment A B C Cost $10,000 $7,000 $3,000 Cash Inflow $12,000. $8,600 $4,000
Accounting provide a. And. b
Capital Budgeting Assume you are evaluating two mutually exclusive projects, the cash flows of which appear below and that your company uses a cost of capital of 13% to evaluate projects such as these. Time Project A Cash Flows Project B Cash Flows 0 -$46,800 -$63,600 1 -21,600 20,400 2 43,200 20,400 3 43,200 20,400 4 43,200 20,400 5 -28,800 20,400 Under what conditions on the cost of capital should project B be preferred to project A?
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Capital Budgeting Assume you are evaluating two mutually exclusive projects, the cash flows of which appear below and that your company uses a cost of capital of 13% to evaluate projects such as these. Time Project A Cash Flows Project B Cash Flows 0 -$46,800 -$63,600 1 -21,600 20,400 2 43,200 20,400 3 43,200 20,400 4 43,200 20,400 5 -28,800 20,400 Calculate the IRR and MIRR of projects A & B. Assume a reinvestment rate of 13% for the calculation of MIRR.
Capital Budgeting Assume you are evaluating two mutually exclusive projects, the cash flows of which appear below and that your company uses a cost of capital of 13% to evaluate projects such as these. Time Project A Cash Flows Project B Cash Flows 0 -$46,800 -$63,600 1 -21,600 20,400 2 43,200 20,400 3 43,200 20,400 4 43,200 20,400 5 -28,800 20,400 Calculate the payback period and discounted payback period for projects A & B.
Return on Investment and Residual Income Johnson Company has two sources of funds: long-term debt and equity capital. Johnson Compary has profit centers in the following locations with the following net incomes and total assets: \table[[,Net Income,Assets],[Las Vegas,$960,000,$4,000,000
Capital Budgeting Assume you are evaluating two mutually exclusive projects, the cash flows of which appear below and that your company uses a cost of capital of 13% to evaluate projects such as these. Time Project A Cash Flows Project B Cash Flows 0 -$46,800 -$63,600 1 -21,600 20,400 2 43,200 20,400 3 43,200 20,400 4 43,200 20,400 5 -28,800 20,400 Sketch the NPV profile for projects A & B.
Winant Inc. is comparing several alternative capital budgeting projects as shown below: Projects A B C Initial investment $80,000 $120,000 $160,000 Present value of net cash flows 90,000 110,000 200,000 Rank the projects in order of highest to lowest according to their profitability index.
XYZ Corporation is considering a capital budgeting project and requires a detailed analysis. The company has provided you with the following financial information and ratios: Return on Investment (ROI): 15% Payback Period: 3 years Net Present Value (NPV): R50,000 Internal Rate of Return (IRR): 12% Cash Flows are as follows: Year 1: R20 000; Year 2: R30 000; Year 3: R40 000 Required: 1.1 Calculate the initial investment required for the project. 1.2 Discuss the significance of each ratio in evaluating the project. 1.3 Based on the given information, should XYZ Corporation undertake the project? Justify your answer. 1.4 Calculate the ARR for XYZ Corporation. Assume depreciation is calculated on the straight-line method and that the project has a scrap value of R5000.
investment QUICK AND SLOW COST $1,000 each, are mutually exclusive, and have the following cash flows. The firm's cost of capital is 10 percent. Cash Inflows Year Q S 1 $1,300 $386 2 - 386 3 - 386 4 - 386 a. According to the net present value method of capital budgeting, which investment(s) should the firm make? b. According to the internal rate of return method of capital budgeting, which investment(s) should the firm make? c. If Q is chosen, the $1,300 can be reinvested and earn 12 percent. Does this information alter your conclusions concerning investing in Q and S? To answer, assume that S’s cash flows can be…
XYZ Corporation is considering a capital budgeting project and requires a detailed analysis. The company has provided youwith the following financial information and ratios:Return on Investment (ROI): 15%Payback Period: 3 yearsNet Present Value (NPV): R50,000Internal Rate of Return (IRR): 12%Cash Flows:Year 1: R20 000Year 2: R30 000Year 3: R40 0001.4 Calculate the ARR for XYZ Corporation. Assume depreciation is calculated on the straight-linemethod and that the project has a scrap value of R5000

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