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Which one of the following factors should the CFO be sure to INCLUDE in the cash flows 1. A company is considering a new project. The CFO plans to calculate the project’s NPV by estimating the relevant cash flows for each year of the project’s life (i.e., the initial investment cost, the annual operating cash flows, and the terminal cash flow), then discounting those cash flows at the company’s overall WACC. Which one ...

Other / Other 27 Apr 2016

Which of the following is an example of a capital market instrument 1. Which of the following statements is most correct? a. While the distinctions are blurring, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise capital from other parties. b. Money market mutual funds usually invest their money in a well-diversified portfolio of liquid common stocks. c. The NYSE operates a ...

Other / Other 27 Apr 2016

Calculate the incremental initial cash flow associated with acquiring the replacement machine 1. Replacement project. Existing machine was purchased 1 years ago at a cost of $20,000. For tax purposes, it is being depreciated straight line at $4,000 annually. It can be sold now for 12,000 or used for 4 more years at which time it will be sold for an estimated $2,500. It provides revenue of $15,000 annually and has cash costs of $4,200 annual ...

Other / Other 27 Apr 2016

Specify the type of traded goods for which forfaiting is applied 1. Bills of Lading. What are bills of lading, and how do they facilitate international trade transactions? 2. Forfaiting. What is forfaiting? Specify the type of traded goods for which forfaiting is applied. Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help ...

Other / Other 27 Apr 2016

Risk in a project which has only negative cash flows 1. Project A and B both have normal cash flows. Project A has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent. Both projects have a cost of capital of 12 percent. Which of the following statements is most correct? a. Both projects have a positive net present value (NPV). b. Project A must have a higher NPV than Project B. c. If the cost of ca ...

Other / Other 27 Apr 2016

How could Blades use accounts receivable financing 1. What organization could Blades contact in order to insure its sales to the Thai retailers? What type of insurance do these organizations provide? 2. How could Blades use accounts receivable financing or factoring, considering that it does not currently have accounts receivable in Thailand? If Blades uses a Thai bank to obtain this financing, how do you think the fact that Blades do ...

Other / Other 27 Apr 2016

Describe the role of the Overseas Private Investment Corporation 1. Small Business Policy. Describe the Small Business Policy. 2. OPIC. Describe the role of the Overseas Private Investment Corporation (OPIC). 3. How could Jim use a letter of credit to ensure that he will be paid for the products he exports? 4. Jim has discussed the possibility of expanding his export business through a second sporting goods distributor in the United K ...

Other / Other 27 Apr 2016

Should Blades renew the agreement with Entertainment Products 1. Using a spreadsheet, conduct a capital budgeting analysis for the proposed project assuming that Blades does not renew the agreement with Entertainment Products. Should Blades establish a subsidiary in Thailand under these conditions? Should Blades renew the agreement with Entertainment Products? 2. Since future economic conditions in Thailand are uncertain, Ben Holt would ...

Other / Other 27 Apr 2016

Explain why there is uncertainty surrounding the cash flows 1. The future value of the baht is highly uncertain. Under a worst case scenario, the baht may depreciate by as much as 5 percent annually. Revise your spreadsheet to illustrate how this would affect Blades’ decision to establish a subsidiary in Thailand (Use the capital budgeting analysis you have identified as the most favorable from questions 2 and 3 to answer this q ...

Other / Other 27 Apr 2016

The cash flows associated with a project under consideration 1. The cash flows associated with a project under consideration are shown below. The required return is 10%. Year CF 0 (1,000) 1 500 2 400 3 200 a. Calculate the NPV of the project. b. Calculate the IRR of the project c. Calculate the MIRR of the project. Business Management Assignment Help, ...

Other / Other 27 Apr 2016