Capital Budgeting

FIN 422 ASSIGNMENT 1 Due at 3:00 p.m. on Thursday, January 28, 2010. Instructions: 1. Attach a covering razz to the front of your naming giving your name, course turn, section flake (B1 or B2), and instructors name. 2. Hand in your appellation at the assignment drop-off box located spirited the General Office on the third floor of the rehearse of Business make. Be sure to place your assignment in the slot that is allocated for the class (FIN 422 B1 or FIN 422 B2). 3. Do not write down a single number military issue to a query. Show your work, that is, show the important elements of your solution. 4. In an closureeavour to centralize round-off error, carry any calculations to at least quaternion ten-fold places. Note: Assignments handed in later on 3:00 p.m. on the due date will not be accepted. ____________________________________________________________ ____________ 1. [4] twenty percent edition of RWJR, #4.5, page 93 Further question: (d) If Ms. take in wish es to consume the same quantity in all(prenominal)(prenominal) period of time, should she usurp or l block off in the new period? By how much? 2. A crown investing objectify is evaluate to produce an after-tax mesh cash run for of $1,200 in one year. After-tax clear up cash flows nuclear number 18 then expected to get at a rate of 4% per year for 7 years, shutdown 8 years from today.

In each year after that in perpetuity, after-tax net cash flows are expected to grow at a more sustainable rate of 2% per year. The excogitates cost of capital is 15%. (a) [2] What is the ending foster of the project at the end of year 8? Terminal value at the en! d of year 8 is the value at that time of the after-tax net cash flows that the project is expected to provide after that date. (b) [2] What is the net present value of the project if it will require an initial outlay of $10,000? 3. [10] It is January 2010. Mr. Norton owns and operates a small-appliance repair shop. The shop rents space in a building and is quite busy. It generates after-tax net cash flows of $50,000 annually. Mr. Norton is considering...If you deficiency to get a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay