Question3: Given the following after-tax cash flow on a new toy for Tyler’s Toys, find the project’s discounted payback period, NPV, and profitability index. The appropriate discount rate for the project is 12%. If the cutoff period is six years for major projects, determine whether management will accept or reject the project under the three different decision models? Initial cash outflow: $10,400,000 Years one through four cash inflow: $2,600,000 each year Years five, six and seven cash inflow: $750,000 each year
Cost of Debt, Cost of Preferred Stock
This article deals with the estimation of the value of capital and its components. we'll find out how to estimate the value of debt, the value of preferred shares , and therefore the cost of common shares . we will also determine the way to compute the load of every cost of the capital component then they're going to estimate the general cost of capital. The cost of capital refers to the return rate that an organization gives to its investors. If an organization doesn’t provide enough return, economic process will decrease the costs of their stock and bonds to revive the balance. A firm’s long-run and short-run financial decisions are linked to every other by the assistance of the firm’s cost of capital.
Cost of Common Stock
Common stock is a type of security/instrument issued to Equity shareholders of the Company. These are commonly known as equity shares in India. It is also called ‘Common equity
Question3:
Given the following after-tax cash flow on a new toy for Tyler’s Toys, find the project’s
discounted payback period, NPV, and profitability index. The appropriate discount rate for the
project is 12%. If the cutoff period is six years for major projects, determine whether
management will accept or reject the project under the three different decision models?
Initial
Years one through four
Years five, six and seven cash inflow: $750,000 each year
Question4:
Self-managed superannuation funds manage $332,000,000 in assets. Approximately 30 percent
of this total amount is invested in Saudi shares, 30 percent is invested in cash, 20 percent is
invested in managed funds and 20 percent is invested in property. If shares return 8 percent, cash
returns 6 percent, managed funds return 7 percent and property returns 4 percent each year for
the next ten years, how much will self-managed superannuation assets be worth after ten years?
Returns compound annually.
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