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Submitted by geniusy_2006 on Fri, 2013-10-11 08:24
due on Tue, 2013-10-15 08:24
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# fin 571 week 5 quiz 100% score guaranteed

1.       Genaro needs to capture a return of 40 percent for his one-year investment in a property. He believes that he can sell the property at the end of the year for \$150,000 and that the property will provide him with rental income of \$25,000. What is the maximum amount that Genaro should be willing to pay for the property?

2.       The process of identifying the bundle of projects that creates the greatest total value and allocating the available capital to the projects is known as

3.       You are considering a project that has an initial cost of \$1,200,000. If you take the project, it will produce net cash flows of \$300,000 per year for the next six years. If the appropriate discount rate for the project is 10 percent, what is the profitability index of the project?

4.       What might cause a firm to face capital rationing?

5.       The WACC for a firm is 19.75 percent. You know that the firm is financed with \$75 million of equity and \$25 million of debt. The cost of debt capital is 7 percent. What is the cost of equity for the firm?

6.      Bellamee, Inc., has semiannual bonds outstanding with five years to maturity and are priced at \$920.87. If the bonds have a coupon rate of 7 percent, then what is the YTM for the bonds?

7.       Beckham Corporation has semiannual bonds outstanding with 13 years to maturity and are currently priced at \$746.16. If the bonds have a coupon rate of 8.5 percent, then what is the after-tax cost of debt for Beckham if its marginal tax rate is 35%? Assume that your calculation is made as on Wall Street.

8.       RadicalVenOil, Inc., has a cost of equity capital equal to 22.8 percent. If the risk-free rate of return is 10 percent and the expected return on the market is 18 percent, then what is the firm's beta if the firm's marginal tax rate is 35 percent?

9.       Which type of project do financial managers typically use the highest cost of capital when evaluating?

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## fin 571 week 5 quiz 100% score guaranteed

body preview (316 words)

1.xxxxxxxxxxxx xxxxxx xxxxx to xxxxxxx x return xx 40 percent xxx xxx one-year investment xx a property. xx xxxxxxxx xxxx xx can xxxx the property xx the xxx of the year xxx xxxxxxxx xxx xxxx xxx xxxxxxxx will provide xxx xxxx rental income xx \$25,000. xxxx is the xxxxxxx xxxxxx xxxx xxxxxx xxxxxx xx xxxxxxx to xxx xxx xxx xxxxxxxxx

xx       xxx xxxxxxx xx xxxxxxxxxxx the bundle xx projects xxxx xxxxxxx xxx greatest total xxxxx and allocating the xxxxxxxxx capital xx the projects xx xxxxx as

3.xxxxxxxxxxxx You are considering a project xxxx has xx initial xxxx xx xxxxxxxxxxx xx you take xxx xxxxxxxx xx will produce xxx xxxx flows xx \$300,000 per xxxx for xxx next xxx xxxxxx If the xxxxxxxxxxx discount xxxx for the project xx 10 xxxxxxxx what is xxx xxxxxxxxxxxxx xxxxx xx the xxxxxxxx

xxxxxxxxxxxxxx What might cause x firm to face capital xxxxxxxxxx

xxxxxxxxxxxxxx xxx xxxx xxx x firm is xxxxx xxxxxxxx You know xxxx xxx firm xx financed xxxx xxx million of xxxxxx xxx xxx

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file1.docx preview (648 words)

xxxxxx needs xx xxxxxxx x return xx xx xxxxxxx for xxx xxxxxxxx xxxxxxxxxx xx x xxxxxxxxx He believes that he xxx sell the property at xxx xxx xx xxx year xxx \$150,000 xxx that the property xxxx xxxxxxx xxx with rental income xx \$25,000. xxxx is xxx maximum amount xxxx Genaro should be xxxxxxx to xxx xxx xxx property?

The process xx xxxxxxxxxxx xxx bundle xx xxxxxxxx xxxx xxxxxxx xxx xxxxxxxx xxxxx value and xxxxxxxxxx xxx xxxxxxxxx xxxxxxx to the xxxxxxxx xx known xx

You xxx xxxxxxxxxxx x project xxxx has an xxxxxxx xxxx of \$1,200,000. xx xxx xxxx xxx xxxxxxxx xx will xxxxxxx net cash xxxxx of xxxxxxxx xxx year for xxx xxxx six xxxxxx If xxx xxxxxxxxxxx discount xxxx xxx xxx project xx xx percent, what xx the xxxxxxxxxxxxx index of the project?

What might xxxxx a firm xx xxxx capital rationing?

The xxxx for a firm is xxxxx xxxxxxxx xxx xxxx that the firm xx xxxxxxxx with xxx million xx xxxxxx xxx xxx million xx xxxxx The xxxx xx debt capital is 7 xxxxxxxx xxxx xx the xxxx of xxxxxx

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