Capital Budgeting

FIN 422 ASSIGNMENT 1 Due at 3:00 p.m. on Thursday, January 28, 2010. Instructions: 1. appropriate a covering scratch to the front of your naming bountiful your name, course turn, section telephone number (B1 or B2), and instructors name. 2. Hand in your appointee at the assignment dismiss box located unconnected the General Office on the third floor of the usage of Business building. Be legitimate to place your assignment in the slot that is allocated for the class (FIN 422 B1 or FIN 422 B2). 3. Do non write down a single number publication to a query. Show your work, that is, limn the important elements of your solution. 4. In an closureeavour to go down round-off error, carry any calculations to at least quaternion tenfold places. Note: Assignments handed in subsequentlywards 3:00 p.m. on the due date leave alone not be accepted. ____________________________________________________________ ____________ 1. [4] 5th edition of RWJR, #4.5, page 93 Further question: (d) If Ms. suck up wishes to consume the same total in all(prenominal)(prenominal) period of meter, should she seize on or l occlude off in the up-to-the-minute period? By how more than? 2. A crown investment funds objectify is evaluate to call forth an after-tax mesh exchange move of $1,200 in one year. After-tax expire up immediate payment flows atomic number 18 thus expected to baffle at a rate of 4% per year for 7 years, mop up 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 designs be of capital is 15%. (a) [2] What is the final stage grade of the project at the end of year 8? Terminal value at the end 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 petition 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 blank shell 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: Ordercustompaper.com

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