W AutoSave Off BFIN 350 Assignment T2d - Compatibility Mode . Saved to this PC . Search (Alt+Q) Sana Lee SL 0 X File Home Insert Draw Design Layout References Mailings Review View Help Grammarly Comments v Share * 12 ~ A" A" Aa Ap b A A Find Arial Heading ' Heading 2 Heading 3 Gc Replace Paste BIUvab x xALAAOBS Dictate Editor Open Select Grammarly Undo Clipboard Font Paragraph Styles Editing Voice Edito Grammarly SIGN IN TO OFFICE It looks like your stored credentials are out of date. Please sign in as lee00127 @rangers.uwp.edu so we can verify your subscription. Sign In . I . 2. . I . . . 1 . . . 1 . . . 2 . . . 1 . . . 3 . . . 1 . . . Page 3 of 6 Corporate Finance BFIN350 You need to choose between two machines based on the following information: Machine 1 has a 4 year life, costs $322,500 with pre-tax operating costs of $64,500 per year. Machine 2 has a 3 year life, costs $425,250 with pre-tax operating costs of $39,600 per year. Both machines have a salvage value of $22,500 and are classed with a CCA rate of 18% per year. The company tax rate is 30% and the discount rate is 10% What is the EAC? Which machine would you select as an investment? Answer Place your final answer in the box. a) EAC? b) Which Machine? Show your work here (mandatory): Page 3 of 6 868 words x English (United States) 17 Accessibility: Unavailable [ Focus + 27 6:34 PM Type here to search O 9 w 6C Mostly cloudy 3/27/2022 FAW AutoSave Off BFIN 350 Assignment T2d - Compatibility Mode . Saved to this PC . Search (Alt+Q) Sana Lee SL 0 X File Home Insert Draw Design Layout References Mailings Review View Help Grammarly Comments V Share Find Arial * 12 ~ A" A" Aa Ap b A A Heading ' Heading 2 Heading 3 Gc Replace Paste BIUvab x xALAAOB= = ~ ~ Dictate Editor Open Select Grammarly Undo Clipboard Font Paragraph Styles Editing Voice Edito Grammarly SIGN IN TO OFFICE It looks like your stored credentials are out of date. Please sign in as lee00127@rangers.uwp.edu so we can verify your subscription. Sign In X . . I . . . I . . 20 . 1. . . 1 . . . 1 . . . 2 . . 4 . .. 5 . . . | . . . 6 . . Corporate Finance BFIN350 A stock has an expected return of 17.5% and a beta of 1.65. Another asset which has low risk with a beta of .25 is earning 3.25% a) What is the expected return on a portfolio that is comprised of one-half the higher risk stock and one-half the lower risk asset? b) Calculate the weights of each of these if they are the only 2 holdings in a portfolio which has a beta of 1.00. C) If the portfolio of these two holdings earned 10%, what would be the beta of the portfolio? Answer Place your final answer in the box. a) Expected Return? b) Weight of each holding? c) Beta? Show your work here (mandatory): Page 3 of 6 868 words x English (United States) ? Accessibility: Unavailable "D Focus 27 w 6:34 PM Type here to search O -6 C Mostly cloudy 3/27/2022W AutoSave Off BFIN 350 Assignment T2d - Compatibility Mode . Saved to this PC . Search (Alt+Q) Sana Lee SL 0 X File Home Insert Draw Design Layout References Mailings Review View Help Grammarly Comments V Share * 12 ~ A" A" Aa Ap A A Find Arial Heading Heading 2 Heading 3 Gc Replace Paste BIUvab x xALAAOB= = Dictate Editor Open Select Grammarly Undo Clipboard Is Font Paragraph Styles Editing Voice Edito Grammarly . . I . . . I . . . . I . .. . .. . 2 . 5 . . . I . . . 6 . 6 . 1 . . . If the market risk premium is 5.8% and company has the following: Common Stock: 6850000 shares outstanding, selling at $28 per share, beta 1.6 Preferred Stock: 350,000 shares outstanding, 4.8% yield, selling at $88.5 per share Debt: 138000 5.5% semi annual bonds outstanding, par value $1000 each with 12 years to maturity, selling at 117% of par Tax Rate: 30% Calculate the company's market value Calculate the percentage of the market value capital structure that is debt Calculate the percentage of the market value capital structure that is common shares d) Calculate the percentage of the market value capital structure that is preferred shares (a Discuss (3 to 10 sentences) how the matter of risk relates to capital structure Answer Place your final answer in the box. a) Market Value? b) Debt percentage c) Common Share percentage d) Preferred Share percentage e) Risk and Capital Structure Show your work here (mandatory): Page 6 of 6 868 words X English (United States) 17 Accessibility: Unavailable "D Focus 27 Type here to search O 9 6:35 PM W -6'C Mostly cloudy 3/27/2022W AutoSave Off BFIN 350 Assignment T2d - Compatibility Mode . Saved to this PC . Search (Alt+Q) Sana Lee SL 0 X File Home Insert Draw Design Layout References Mailings Review View Help Grammarly Comments V Share Find Arial * 12 ~ A" A" Aa Ap b A A Heading Heading 2 Heading 3 Gc Replace Paste BIUvab x xALAAOB= Dictate Editor Open Select Grammarly Undo Clipboard Font Paragraph Styles Editing Voice Edito Grammarly . . I . . . . I . . . 1 . . . I . . 2 . . . I . . . 3 . . . 1 . 1 . . .6 . 6 . 1 . Page 1 of 6 Corporate Finance BFIN350 There are two projects. Project Everest has an outflow of cash of $34,000 in years 0 and 1, followed by an inflow of $49,000 in each of the years 2 and 3. Project Seabed has a cash outflow of $60,000 in year 0, followed by an inflow of $29,000 in years 1, 2, and 3. If the profitability index decision rule applies and the required return is 7.5%, which project should be selected? b ) If the NPV decision rule applies then which project should be selected? Answer Place your final answer in the box. Question Your Response a) Profitability Index - Which Project? b) NPV - Which Project? Show your work here (mandatory): Page 2 of 6 868 words X English (United States) 17 Accessibility: Unavailable "D Focus 27) Type here to search O w 6:36 PM -6C Mostly cloudy 3/27/2022