PRIN.OF CORP.FINANCE-CONNECT ACCESS
13th Edition
ISBN: 2810023360757
Author: BREALEY
Publisher: MCG
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Chapter 22, Problem 12PS
a.
Summary Introduction
To determine: The
a.
Expert Solution
Answer to Problem 12PS
The present value of payoffs is $16,875,000.
Explanation of Solution
Determine the present value of payoffs
Excel Spreadsheet:
Therefore the present value of payoffs is $16,875,000.
b.
Summary Introduction
To determine: The abandonment value.
b.
Expert Solution
Answer to Problem 12PS
The abandonment value is $1,936,448.60.
Explanation of Solution
Determine the gain value
The gain value is calculated if the demand is buoyant.
Therefore the gain value is 33.33%.
Determine the loss value
The loss value is calculated if the demand is sluggish.
Therefore the loss value is -11.11%.
Determine p
The value of put can be calculate using the risk neutral method, were p is identical to the probability of increase in the asset value.
Therefore p is 0.408.
Determine the abandonment value
If the demand is sluggish the payoffs will be $0 and if the demand is buoyant the payoffs is $3,500,000.
Therefore the abandonment value is $1,936,448.60.
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In the scenario, Sharp’s employer has been putting more emphasis on controlling costsfor the various businesses. With the slowing of overall spending in the construction sector,Travolta had ordered managers to closely monitor expenses. He had sold several companiesand has given vice presidents greater responsibility for statements of financial positions. Whatpositive and negative consequences might this pose to the company in future fraud prevention?Outline at least three of each type. Please use sources and insert intext citiations Apa 7 format in the answer and provide the links and references below.
https://docs.google.com/document/d/1MpthrFl3eAnMKR-EprYRP9sMo8Ll0WtbhxhpGtLbdcw/edit?usp=sharing
file:///C:/Users/rafan/Downloads/Assignment%201%20Paving%20Company%20Case%20S2%202024%20to%202025.pdf
Using the link for the fraud case answer only this question below.
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Option should be match
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Chapter 22 Solutions
PRIN.OF CORP.FINANCE-CONNECT ACCESS
Ch. 22 - Real options Respond to the following comments. a....Ch. 22 - Prob. 2PSCh. 22 - Real options True or false? a. Real-options...Ch. 22 - Prob. 4PSCh. 22 - Real options Describe each of the following...Ch. 22 - Expansion options Look again at the valuation in...Ch. 22 - Expansion options Look again at Table 22.2. How...Ch. 22 - Prob. 8PSCh. 22 - Timing options Look back at the Malted Herring...Ch. 22 - Prob. 10PS
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