Suppose you have a 120 MW power power plant with electricity demand will be 100MW over the nex $500/MWh. You find out that all of your compe at $40/MWh. Which of the following bids woul Select one: O a. $20/MWh O b. $500/MWh

Q: a)A stock hasa beta of 1.5 and an is the risk free rate if the mauked rate of retum is 12.57.…

A: Answer 1 A) Information Provided: Beta = 1.5 Expected return = 16.35% Market rate of return = 12.5%

Q: Project B has an upfront cost of $45,000 and expected OCFs (already calculated) of $22,000 year 1,…

A: See above.

Q: Solve what is being asked and show your complete and neat solution. (ROUND OF PV FACTORS TO 4…

A: Present Value of Cashflows  = Cashflows/ Discount rate = 1000/15% = 6,666.67

Q: ears. If both projects have a WACC of 16%, which project would you recommend?

A: S: Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate =6500[1-(1.16)^-5]/0.16…

Q: You have kust been offered a contract worth $1.16millon per year for 6 yean. Howeves, to take the…

A: Capital budgeting provides various modern methods of capital budgeting. One of them is the net…

Q: A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 2 3 5…

A: NPV is also known as Net Present Value. It is a capital budgeting techniques which help in decision…

Q: Bruin, Incorporated, has identified the following two mutually exclusive projects: Year Cash Flow…

A: The IRR is the discount rate which equates the present value of cash inflows and the present value…

Q: or has an opportunity of borrowing sh. 1000,000 to buy a machine which will only last one year and…

A: Marginal  efficiency of capital is the more return on investment achieved than the normal rate of…

Q: EVALUATION o Given the following mutually-exclusive alternatives and a Minimum Attractive Rate of…

A: The process that analyses and evaluates an investment/project's profitability and feasibility is…

Q: Your firm is considering this project for a firm with an 8% discount rate: Year A |-400,000 -220,000…

A: Net Present Value (NPV) is a capital budgeting technique that uses a discount rate to bring all the…

Q: Suppose that you could invest in the following projects but have only $29,670 to invest. How would…

A: Step 1: Given that,ProjectCostNPVA$8,260$4,300B$10,850$6,470C$9,070$4,830D$7,170$3,940 Step 2: The…

Q: If the alternatives are mutually exclusive and the MARR is 15% per year, the alternative to select…

A: The minimum possible required return at which a company is willing to invest its funds is term as…

Q: There are two project options to choose from and decide a better option for the company based on the…

A: Given information: Initial investment cost of option A is -10,000 Initial investment cost of option…

Q: You are considering the following projects and can take only one. Your cost of capital is 11%. 0 1 2…

A: The expense a company generates to finance its activities is measured by the cost of capital. It…

Q: Consider the following two mutually exclusive projects: (a) Which project has the higher…

A: a) Working note:

Q: The present worth of alternative X is $[ Alternative (Click to select) is selected by the company.…

A: Present worth of Alternative = First Cost + Present Value of the Maintenance cost per Year - Present…

Q: A project needs an initial investment of $100 and generates -$20 and $130 in year 1 and 2…

A: The modified internal rate of return is used in capital budgeting to evaluate the profitability of…

Q: A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: You are asked to investigate the three investment options shown in the table below for your firm…

A: Firms MIRR= 12% IRR of Project A = 15% IRR of Project B = 7% IRR of Project C = 10% It is evident…

Q: An entrepreneur has $180,000 is available for investment and Minimum Acceptable Rate of Return…

A: Total investment = $180,000 MARR = 17%  First Alternative earn = 25% Investment in first alternative…

Q: 0 1 ring the following mutually exclusive projects: 2 Project 1 -$250 $75 Project 2 -$400 $350 Which…

A: NPV is most important capital budgeting decisions making method used in projects rationing. Projects…

Q: Project A has an IRR of 14% and NPV of $8,000 while project B has an IRR of 17% and an NPV of…

A: NPV means Net present value.It is a capital budgeting technique used for making investment…

Q: 1. Par = $10,000 a. For what price could you purchase the T-bill? b. What price would you get if you…

A: The bid price of a security is the highest price that a buyer is willing to pay for it. The ask…

Q: Calculate the Mean value

A: PERT technique refers to the techniques which are used to simplify the scheduling and planning of…

Q: Suppose that you could invest in the following projects but have only $29,700 to invest. How would…

A: Solution: As we have $29,700 to invest, therefore company should invest in project first that…

Q: b) Suppose you want to buy a custom-made program to manage your IS project from Supertuna co., and…

A: Present value technique is the method wherein we discount the future cashflows with the applicable…

Q: formula for the internal rate of return on this project.

A: Note: Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: What is the price implied for an asset providing $100 in state 1 and $50 in state 2?

A: price implied can be calculated using the formula: Price Implied = future value in state 1 x Risk -…

Q: please solve with formulas like (F/P, 5% , n) no with the excell. D.1. Your client asks you to check…

A: The present value of all benefits will give the cost that can

Q: Please somebody help me for my assignment lesson in NPV.   A project costing $150,000 has…

A: A payback period is a non discounted technique of capital budgeting and is the period in which the…

Q: An IT Project with MARR=10%. If this investment is tested at i=15%, its NPV is +$4550 at i=15%; and…

A: IRR can be computed as follows

Q: Using the information in this module, please compute the Black Scholes Merton price of a European…

A: An option is an agreement between two parties granting one the opportunity to buy or sell a security…

Q: A farmer holds a put option to sell 10 cows with strike price $1,000 and exercise time 1 year.…

A: The question is based on the concept of valuation of put option by use of binomial pricing model.…

Q: Financial asset EGGO requires a $3,000 investment which will return $2,000 twenty percent of the…

A: Variance is calculated by following formula:-Variance = whereR= returnER = expected returnP=…

Q: You have two project proposals that have just been placed on your desk, projects A and B. They offer…

A: Project BInitial Investment = $20,000Internal Rate of Return = IRR =?

Q: Lipsion Ltd company is thinking about investing in one of two potential new products for sale. The…

A: NET PRESENT VALUE  Net Present Value is one of the Important Capital Budgeting Techniques. Net…

Q: You plan to buy a home for $100,000 in the future and you want to guarantee that you could afford it…

A: Required amount in Future=$100,000Current price of K==$50Current Price of L=$50State-1Future price…

Q: Where does the opportunity cost should go when calculating the NPV of the project? is that in the…

A: Opportunity Cost is a loss of benefit when we choose one option over that other.

Q: Suppose that we can describe the world using two states and that two assets are available, asset K…

A: Expected value is calculated as shown below.

Q: Please correct answer and don't use hend raiting

A: Detailed explanation:In conclusion, The Net Present Value (NPV) of the investment is $6,584.66.…

Q: Use the graph below to answer the following two statements. (2)   Project _________ has the higher…

A: IRR is the rate at which NPV of the project is zero

Q: Sulsa invests $9,122.85 at t = 0 and $29,100 at t = 2. In return, she receives %3D $28,223 at t = 1…

A: Here, Investment at t=0 is $9,122.85 Investment at t=2 is $29,100 Receivable Amount at t=1 is…

Q: Project has the highest NPV and Project has the highest IRR.

A: Net present value is determined by deducting the current value of cash flows from the initial…

Q: ompany is evaluating two m ct requires an investment o turns" at the end of each ye: Project P10,00-…

A: Ans-a-For project A PV of cash flows @11%=47177.2 PV of cash flows @5%=53579.53…

Q: A power Plant has a capital cost of 12 M$ and annual return of 400,000 $, where B Plant has a…

A: Return on Capital employed = Annual return/capital cost

Q: A firm with a WACC of 10% is considering the following mutually exclusive projects: 0 1 $40 $200 2…

A: Net Present Value (NPV) of the project is the sum of the present value of all the cash inflows and…

Q: . Using the following information, calculate the price of a 12-month short call option using a…

A: The call option refers to the derivative instrument that provides its holder with the choice of…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.