Question: plz show the steps in calculations {a} We are evaluating a project that costs RM604,000, has an 8-year life, and has no salvage value. Assume

 plz show the steps in calculations {a} We are evaluating a

plz show the steps in calculations

project that costs RM604,000, has an 8-year life, and has no salvage

{a} We are evaluating a project that costs RM604,000, has an 8-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 55,000 units per year. Price per unit is RM36, variable cost per unit is RMIT, and xed costs are RM685,000 per year. The tax rate is 21 percent and we require a return of 15 percent on this project. (i) Calculate the base-case cash ow and NPV. (6 marks) (ii) Assume the sales gure increases to 56,000 units per year, calculate the sensitivity otN'PV to changes in the sales gure? (9 marks) W {a} You have been given the following information: State of Economy Probability of State of Rate Bf Return If State Occurs Economy Recession 0.25 0.33 (i) Calculate the expected return for the two stocks. (6 marks) (ii) Calculate the standard deviation for the two stocks. (10' marks) {h} Miller Manufacturing has a target debt-equity ratio of .40. Its cost of equity is 11.8 percent and its cost of debt is 6.5 percent. If the tax rate is 21 percent, what is the company's WACC? (5 marks) {c} The Nixon Corporation's common stock has a beta of .95. If the risk-free rate is 2.7 percent and the expected return on the market is 10 percent, what is the company's cost of equity capital

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