A company has a current market value of $65 per share with earnings per share of $4.32. What is the net present value of its growth opportunities if the required rate of return is 8 percent? (2 pts.) 

Note: Please express your result as dollars and keep no digits after the decimal point. 

 

2. A bakery is considering the purchase of a $9,500 coffee maker. The coffee maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 5,300 cups of coffee per year, with each costing $2.15 to make and priced at $4.25. Assume that the discount rate is 14 percent and the tax rate is 30 percent. Should the bakery make the purchase? (4 pts.) 

Answer rating: 100% (QA)

To calculate the net present value NPV of the growth opportunities for the company we can use the Go... View the full answer