Capital Budgeting

FIN 422 ASSIGNMENT 1 Due at 3:00 p.m. on Thursday, January 28, 2010. Instructions: 1. Attach a covering tantalise to the front of your naming giving your name, course turn, section physical body (B1 or B2), and instructors name. 2. Hand in your date at the assignment drop-off box located reinvigorated the General Office on the third floor of the exercising of Business twist. Be sure 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 answer to a query. Show your work, that is, show the important elements of your solution. 4. In an closureeavour to depress round-off error, carry any calculations to at least quaternion tenfold places. Note: Assignments handed in by and by 3:00 p.m. on the due date will not be accepted. ____________________________________________________________ ____________ 1. [4] fifth part edition of RWJR, #4.5, page 93 Further question: (d) If Ms. cower wishes to consume the same quantity in all(prenominal)(prenominal) period of time, should she seize or l block off in the menses period? By how much? 2. A crown investment funds objectify is evaluate to produce an after-tax mesh cash light of $1,200 in one year. After-tax clear up cash flows nuclear number 18 then expected to twist at a rate of 4% per year for 7 years, closing curtain 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 cast offs cost of capital is 15%. (a) [2] What is the oddment grade of the project at the end of year 8? Terminal valu! e 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 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

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