CORPORATE FINANCE- ACCESS >C<
12th Edition
ISBN: 9781307447248
Author: Ross
Publisher: MCG/CREATE
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Textbook Question
Chapter 18, Problem 1CQ
APV How is the APV of a project calculated?
Expert Solution & Answer
Summary Introduction
To determine: Adjusted present value and how it is calculated.
Introduction:
Adjusted present value is known as NPV (net present value) of a company or project. By considering financial benefits, adjusted present value tax shield such as deductible interest.
Explanation of Solution
The following are the ways by which adjusted present value:
Adjusted present value is equivalent to the NPV of the project that is the project worth for an unlevered company added to the net present value of financing side-effects.
Formula for calculating adjusted present value:
The adjusted present value is computed by adding the base value of net present value with the NPV of all financial side effects.
Adjusted present value=[Base value of net present value+Net present value of all financial side effect]
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Need answer correctly if image is blurr then please comment i will write values.
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Consider the following gasoline sales time series. If needed, round your answers to two decimal digits.
Week
Sales (1,000s of gallons)
1
17
2
21
3
19
4
23
5
18
6
16
7
20
8
18
9
22
10
20
11
15
12
22
(a)
Show the exponential smoothing forecasts using α = 0.1, and α = 0.2.
ExponentialSmoothing
Week
α = 0.1
α = 0.2
13
(b)
Applying the MSE measure of forecast accuracy, would you prefer a smoothing constant of α = 0.1 or α = 0.2 for the gasoline sales time series?
An smoothing constant provides a more accurate forecast, with an overall MSE of .
(c)
Are the results the same if you apply MAE as the measure of accuracy?
An smoothing constant provides a more accurate forecast, with an overall MAE of .
(d)
What are the results if MAPE is used?
An smoothing constant provides a more accurate forecast, with an overall MAPE of .
After many sunset viewings at SUNY Brockport, Amanda dreams of owning a waterfront home on Lake Ontario. She finds her perfect house listed at $425,000. Leveraging the negotiation skills she developed at school, she persuades the seller to drop the price to $405,000. What would be her annual payment if she opts for a 30-year mortgage from Five Star Bank with an interest rate of 14.95% and no down payment?
a- $25,938
b- $26,196
c- $24,500
d- $27,000
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