Complete question 4 and please show your work

i have added the two questions that its reffering to

X cut Arial bcopy 10 Paste BTU - Format Painter Clipboard AA = 10 let A-E33 Metion at Alignment G $% Conditional format Formation - Tablet Styles 5 Font Number E23 EX A B D F G H 1 Question 4 (5 Marks) 2 Refer to Questions 2 and 3. The land for the factory will cost $600,000 3. The factory will cost $8,120,000 to build and construction will take two 4 years with construction costs payable in equal installments at the start of each 5 year. The factory will operate for 20 years. At the end of its 20 year lifespan. 6 the land can be resold for $220,000 7 There is a 70% probability that the factory's net operating cash flows will be 9 $1,093,575 ; however, there is a 30% chance that net cash flows will only be 10 $679,172 You may assume that net operating cash flows are received at the 11 end of each year. 12 13 a) What are the Expected net operating cash flows per year? Mark Round your answer to 2 decimal places) 15 b) What is the Internal Rate of Return for the project? 16 Mark (Round your answer to one one hundroth of a percent) WC) What is the Net Present Value of the project? 18 (1 Mark Round your answer to 2 decimal places) Enter Answer Enter Answer Enter Answer Yes } Check No 20 d) Should Anna recommend that the J Corporation build the factory? 21 (2 Marks) 22 23 24 Complete your rough work in the space bok Enter your final Answer Title Page Question 1 Question 2 Question Question 4 Questions 000 Clipboard Font Alignment Number F29 C D G B 1 Question 2 (3 Marks) 2 Anna is a Vice President at the J Corporation. The company is considering 3 investing in a new factory and Anna must decide whether it is a feasible 4 project. In order to assess the viability of the project, Anna must first calculate 5 the rate of return that equity holders expect from the company stock. The 6 annual returns for J Corp. and for a market index are given below. Currently, 7 the risk-free rate of return is 1.6% and the market risk-premium is 3.5% 8 0.82 9 a) What is the beta of J Corp.'s stock? 10 (1 Mark)(Round your answer to two decimal places) b) Using the CAPM model, what is the expected rate of return on J Corp. stock for 11 the coming year? 12 (2 Marks)(Round your answer to one one-hundreth of a percent) J Corp Market Return Return Year (%) (%) 4.45% Enter your Final Answer Here 13 14 15 16 17 18 19 1 2 3 4 -4.17 17 29 24.47 25.47 -29.77 31,49 25.19 25.95 9.83 19.29 -11.77 -13.77 6 7 8 9 10 11 12 -2.00 8.73 12.32 13,32 -14.80 15.83 12 68 13.06 5.00 9.73 -5.80 -6.80 21 23 Complete your rough work in the space below 26 27 20 Paste Format Painter BISA Merge & Center $ % 938 Clipboard Font Alignment Number E2 I A D E F G B 1 Question 3 (3 Marks) 2 Refer to Question 2. Now that Anna has determined an appropriate rate 3 of return for J Corp.'s stock, she must calculate the firm's Weighted Average 4 Cost of Capital (WACC). There are currently 53.4 Million 5 J Corp. common shares outstanding. Each share is currently priced at 6 $17.71 As well, the firm has 9,000 bonds outstanding and each 7 bond has a face value of $10,000, a yield to maturity of 3.73% and a 8 quoted price of $10,173.20. J Corp.'s tax rate is 30%. 9 J Corp. has no preferred shares outstanding. 1 What is J Corp.'s WACC? 8.00% 12 (Round your answer to one one hundredth of a percent) 1 Enter your Final Answer Hero 4 Complete your rough work in the space below 10 3 5 6 7 Calculation Beta of J Corps stock 8 9 0 Return X Return m 1 2 3 4 x-mean of x m-mean of m A B -2 - 14 21 8.73 7.25 12.32 14.43 13.32 16.43 4.17 17.29 24.47 26.47 2 3 4 AXB B2 7 11 100 99 3.62 26 27 721 104.09 821 134.95 X cut Arial bcopy 10 Paste BTU - Format Painter Clipboard AA = 10 let A-E33 Metion at Alignment G $% Conditional format Formation - Tablet Styles 5 Font Number E23 EX A B D F G H 1 Question 4 (5 Marks) 2 Refer to Questions 2 and 3. The land for the factory will cost $600,000 3. The factory will cost $8,120,000 to build and construction will take two 4 years with construction costs payable in equal installments at the start of each 5 year. The factory will operate for 20 years. At the end of its 20 year lifespan. 6 the land can be resold for $220,000 7 There is a 70% probability that the factory's net operating cash flows will be 9 $1,093,575 ; however, there is a 30% chance that net cash flows will only be 10 $679,172 You may assume that net operating cash flows are received at the 11 end of each year. 12 13 a) What are the Expected net operating cash flows per year? Mark Round your answer to 2 decimal places) 15 b) What is the Internal Rate of Return for the project? 16 Mark (Round your answer to one one hundroth of a percent) WC) What is the Net Present Value of the project? 18 (1 Mark Round your answer to 2 decimal places) Enter Answer Enter Answer Enter Answer Yes } Check No 20 d) Should Anna recommend that the J Corporation build the factory? 21 (2 Marks) 22 23 24 Complete your rough work in the space bok Enter your final Answer Title Page Question 1 Question 2 Question Question 4 Questions 000 Clipboard Font Alignment Number F29 C D G B 1 Question 2 (3 Marks) 2 Anna is a Vice President at the J Corporation. The company is considering 3 investing in a new factory and Anna must decide whether it is a feasible 4 project. In order to assess the viability of the project, Anna must first calculate 5 the rate of return that equity holders expect from the company stock. The 6 annual returns for J Corp. and for a market index are given below. Currently, 7 the risk-free rate of return is 1.6% and the market risk-premium is 3.5% 8 0.82 9 a) What is the beta of J Corp.'s stock? 10 (1 Mark)(Round your answer to two decimal places) b) Using the CAPM model, what is the expected rate of return on J Corp. stock for 11 the coming year? 12 (2 Marks)(Round your answer to one one-hundreth of a percent) J Corp Market Return Return Year (%) (%) 4.45% Enter your Final Answer Here 13 14 15 16 17 18 19 1 2 3 4 -4.17 17 29 24.47 25.47 -29.77 31,49 25.19 25.95 9.83 19.29 -11.77 -13.77 6 7 8 9 10 11 12 -2.00 8.73 12.32 13,32 -14.80 15.83 12 68 13.06 5.00 9.73 -5.80 -6.80 21 23 Complete your rough work in the space below 26 27 20 Paste Format Painter BISA Merge & Center $ % 938 Clipboard Font Alignment Number E2 I A D E F G B 1 Question 3 (3 Marks) 2 Refer to Question 2. Now that Anna has determined an appropriate rate 3 of return for J Corp.'s stock, she must calculate the firm's Weighted Average 4 Cost of Capital (WACC). There are currently 53.4 Million 5 J Corp. common shares outstanding. Each share is currently priced at 6 $17.71 As well, the firm has 9,000 bonds outstanding and each 7 bond has a face value of $10,000, a yield to maturity of 3.73% and a 8 quoted price of $10,173.20. J Corp.'s tax rate is 30%. 9 J Corp. has no preferred shares outstanding. 1 What is J Corp.'s WACC? 8.00% 12 (Round your answer to one one hundredth of a percent) 1 Enter your Final Answer Hero 4 Complete your rough work in the space below 10 3 5 6 7 Calculation Beta of J Corps stock 8 9 0 Return X Return m 1 2 3 4 x-mean of x m-mean of m A B -2 - 14 21 8.73 7.25 12.32 14.43 13.32 16.43 4.17 17.29 24.47 26.47 2 3 4 AXB B2 7 11 100 99 3.62 26 27 721 104.09 821 134.95