QUESTION: Ramirez Company is considering a project that will require a $500,000 loan. It currently has total liabilities of $220,000 and total assets of $620,000. a. Compute Ramirez's present debt-to-equity ratio. b. Compute Ramirez's debt-to-equity ratio assuming it borrows $500,000 to fund the project.

K.Broni Company is considering two mutually exclusive investments. Project P and Project The expected cash flows of these projects are as follows: Year                               Project (P)                              Project (Q)                                             ($)                                          ($) 0                                       (1,000)                                  (1,600) 1                                       (1,200)                                     200 2                                         (600)                                      400  3                                         (250)                                      600 4                                         2,000                                      800 5                                         4,000                                      100   (a) Construct the NPV profiles for Projects P and Q. (b) What is the IRR of each project? (c) Which project would you choose if the…

If Campbell were to purchase a new warehouse for 1.1 million and finance it entirely with long-term debt, what would be the firm's new debt ratio?  The new debt ratio will be account payable 495,000 notes payable 243,000 current liabilities 738,000 long term debt 1,207,000 common equity 5,079,000  total liabilities and equity 7,024,000

Case 1: 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 8 percent to evaluate projects such as these. Time Project A Cash Flow Project B Cash Flow 0 -$650 -$700 1 100 300 2 250 -200 3 250 550 4 200 200 5 100 80 a. Calculate the payback of Project A. b. Calculate the discounted payback of Project A. c. Calculate the IRR of Project A. d. Using the NPV method and assuming a cost of capital of 8 percent, which of these projects should be accepted?

Company A has provided figures for two investment projects, only one of which may be chosen. These are the calculations based on the figures:   Payback Period The Accounting Rate of Return / Return on Capital Employed Net Present Value Project A 2 years 4 months 27.08% £63,705 Project B 2 years 7 months 39.47% £74.971 Analyse and provide recommendations as to what project needs to be chosen based on the calculations above.

Park Company is considering an investment that requires immediate payment of $27,215 and provides expected cash inflows of $8,400 annnually for four years. Assume Park Company requires a 8% return on it's investments. A. What is the net Present Value of this investment? (PV of $1, FV of $1, PVA of $1 and FVA of $1) B. Based on NPV alone, should Park Company invest?

u are given the following information concerning a firm: sets required for operation: $5,700,000 evenues: $8,600,000 berating expenses: $8,100,000 come tax rate: 40%. anagement faces three possible combinations of financing: 1. 100% equity financing 2. 35% debt financing with a 5% interest rate 3. 70% debt financing with a 5% interest rate a. What is the net income for each combination of debt and equity financing? Round your answers to the nearest dollar. 1 Net income $ 2 3 $ b. What is the return on equity for each combination of debt and equity financing? Round your answers to one decimal place. Return on equity 1 2 3 % % % c. If the interest rate had been 10 percent instead of 5 percent, what would be the return on equity for each combination of debt and equity financing? Round your answers to one decimal place. Return on equity 1 2 3 % % % d. What is the implication of the use of financial leverage when interest rates change? The use of financial leverage is likely to -Select- the…

You and a coworker are analyzing two proposed capital investments with the following cash flows: Year Project A Project B 0 -$22,000 -$38,000 1 17,000 9,500 2 5.400 9,500 3 5,400 9,500 4 2,000 26,600 The cost of capital for both projects is 10 percent. Calculate the profitability index (PI) for each project. (Do not round discount factors. Round intermediate calculations to 2 decimal pla e.g. 15.25 and final answer to 4 decimal places, e.g. 1.2527.)

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