First Firm has 946 shares outstanding and free cash flows of $46 per year. The firm's...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
First Firm has 946 shares outstanding and free cash flows of $46 per year. The firm's cost of capital is 0.11. First Firm has $27 of cash. Firm leadership wants to decide whether it should repurchase shares of make an investment with its cash. The investment would increase yearly cash flows to $53 per year. What is the NPV of the investment? First Firm has 946 shares outstanding and free cash flows of $46 per year. The firm's cost of capital is 0.11. First Firm has $27 of cash. Firm leadership wants to decide whether it should repurchase shares of make an investment with its cash. The investment would increase yearly cash flows to $53 per year. What is the NPV of the investment?
Expert Answer:
Answer rating: 100% (QA)
To calculate the net present value NPV of the investment we need to comp... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
26. With its current leverage, Impi Corporation will have net income next year of 4.5 million. If Impis corporate tax rate is 35% and pay 8% interest on its debt, how much additional debt can Impi...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
1. Based on the information provided in the case below, what is the key strategic goal for Tim Hortons as of August 2014? It would be a year of dramatic change for Tim Hortons Inc. On August 26,...
-
Melissa is a sole trader. Her capital gains and capital losses for 2020-21 are 27,000 and 700 respectively. She has capital losses brought forward from 2019-20 of 12,900 and she also has unrelieved...
-
A manufacturer claims that in a process of producing kitchen knives, only 2.5% of the knives are dull. Test the claim against the alternative that more than 2.5% of the knives are dull, using a...
-
A semicircular trough of corrugated steel, with diameter \(D=1 \mathrm{~m}\), carries water at depth \(y=0.25 \mathrm{~m}\). The slope is 0.01 . Find the discharge.
-
Compute the value of the chi-square statistic. Exercises 49 refer to the following data: Electric motors are assembled on four different production lines. Random samples of motors are taken from each...
-
On January 15, the end of the first biweekly pay period of the year, North Companys payroll register showed that its employees earned $ 35,000 of sales salaries. Withholdings from the employees...
-
Flexible Budget. At normal capacity, Boulder Products Corp. manufactures 10,000 trail bikes. At that level, unit variable costs for the Assembly Department are: Direct...
-
River Spray Company was organized to grow cranberries. They entered into an agreement with a landowner to lease 125 acres to develop a cranberry bog. The agreement states that River Spray will be...
-
Please help to find examples of reforms that address the medical malpractice crisis factors that states describe. Start with Florida and research other states as well. Also, briefly address whether...
-
If you think a thorough, high-quality needs analysis is daunting on an internal project, imagine if you were an HRIS vendor and your job was to provide a best-of-breed system (see Chapter 3) that...
-
(A) By what percent might you expect the average cost of goods and services to change between January 1, 2015 and December 31, 2015? First, calculate the percent cost change for the period January...
-
Suppose the consumption function is C = $200 + 0.8Y. a. What is the amount of autonomous consumption? b. What is the marginal propensity to consume? c. What would consumption equal when real GDP...
-
What is the marginal propensity to consume if: a. Consumption increases by \($75\) when disposable income rises by \($100\)? b. Consumption falls by \($50\) when disposable income falls by \($100\)?...
-
A 400 k m , 500 k V , 60 H z 400 k m , 500 k V , 60 H z uncompensated three-phase line has a positive-sequence series impedance z = 0.03 + j 0.35 / k m z = 0.03 + j 0.35 / k m and a...
-
1 Let H(F) = { 0 1 X = 0 a 1 001 :) | a, b, c e F) called the Heisenberg group over F. Let b a b 1 d 1 C 0 1 f be elements of H(F). 0 0 1 00 1 (a) Compute the matrix product XY and deduce that H(F)...
-
Provide examples of a situations in which environmental disruptions affected consumer attitudes and buying behaviors.
-
Dome Appliance, Inc., a private firm that manufactures home appliances, has hired you to estimate the companys beta. You have obtained the following equity betas for publicly traded firms that also...
-
a. What were HCA's liabilities-to-assets ratios and times-interest-earned ratios in the years 2005 through 2009? b. What percentage decline in EBIT could HCA have suffered each year between 2005 and...
-
Suppose in Figure 5.3 that the stock prices of target firms in acquisitions responded to acquisition announcements over a three-day period rather than almost instantly. a. Would you describe such an...
-
Examine the flowchart for purchases and do the following: a. Identify the sections of the flowchart and for each section write an accompanying narrative of the document flows. b. Supply answers and...
-
Examine the flowchart for payroll shown and do the following: a. Identify the sections of the flowchart and for each section write an accompanying narrative of the document flows (use pages...
-
In 19X4 XY Company purchased more than \(\$ 10\) million of office equipment under its "special" ordering system, with individual orders ranging from \(\$ 5,000\) to \(\$ 30,000\). "Special" orders...
Study smarter with the SolutionInn App