24. What is the present value of a 10-year $5,000 annuity due if the discount rate is 10%?
Round your answer to the nearest dollar.
47. A company is looking to invest in new production machinery. The market value of common stock is $44 million, the market value of preferred stock is $9 million, and the market value of total debt is $33 million. Analysts have calculated the cost of common equity to be 16%, the cost of preferred equity to be 12%, and the cost of debt to be 9..5%.
What is the weighted average cost of capital if the marginal tax rate is 34%?
Round your answer to two decimal places.
49. What is the payback period for this stream of cash flows if the discount rate is 16%? A. 3.55 years B. 2.96 years C. 3.14 years D. 3.05 years E. 2.84 years
50. What is the net present value of this stream of cash flows if the discount rate is 9%? A. ($4,881) B. $8,421 C. $107 D. $3,128 E. ($2,415)
53. A company is looking to invest in a new asset. The cost of the asset, including shipping and installation costs, is $8.4 million. The company has a buyer for the old asset who is willing to pay $1.2 million. Currently the book value of the old asset is $0. The company will also invest working capital in additional inventory in order to sustain the higher levels of efficiency that come with the new machinery. The total investment in net working capital will be $1.5 million. What is the initial outlay if the company’s marginal tax rate is 39%?
A. $10.63 million
B. $9.17 million
C. $8.70 million
D. $8.10 million
E. $11.10 million
55. After year 3, the company anticipates increasing free cash flows at a rate of 2% per year, indefinitely. The weighted average cost of capital is 11.5 %. What is the value of this firm? Round your answer to two decimal places. A. $1,984.53 million B. $1,578.95 million C. $2,341.78 million D. $1,178.35 million E. $2,147.03 million
56. After year 3, the company anticipates maintaining a future free cash flow that is equal to the third year’s free cash flow indefinitely. What is the value of this firm if the weighted average cost of capital is 10%? A. $2,668,484 B. $1,845,541 C. $1,984,525 D. $3,510,189 E. $2,829,325