Week 1

Final Exam Page 1 1. (TCO A) Which of the pursual does NOT always increase a comp eachs market value? (Points : 5) Increasing the hold growth array of sales Increasing the expected operating(a) favourableness (NOPAT/Sales) Decreasing the capital requirements (Capital/Sales) Decreasing the weighted just embody of capital Increasing the expected rate of surpass on invested capital 2. (TCO F) Which of the following statements is correct? (Points : 5) For a confinement with normal funds flows, any change in the WACC testament change both the NPV and the IRR. To run across the MIRR, we first fuse cash flows at the regular IRR to aline the TV, and indeed we tax write-off the TV at the WACC to find the PV. The NPV and IRR manners both get in that cash flows can be reinvested at the WACC. However, the MIRR method assumes reinvestment at the MIRR itself. If ii projects deplete the same cost, and if their NPV profiles cross in the amphetamine correctly quadrant, then the project with the lavishlyer IRR credibly has more of its cash flows culmination in the later years.

If two projects have the same cost, and if their NPV profiles cross in the upper right quadrant, then the project with the lower IRR probably has more of its cash flows coming in the later years. 3. (TCO D) Church Inc. is presently enjoying comparatively high growth because of a surge in the accept for its hot product. Management expects meshing and dividends to g row at a rate of 25% for the next 4 years, a! fter which arguing forget probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The companys last dividend, D0, was $1.25, its beta is 1.20, the market encounter bountifulness is 5.50%, and the risk-free rate is 3.00%. What is the current price of the vernacular acquit? a. $26.77 b. $27.89 c. $29.05 d. $30.21 e. $31.42 (Points : 20) 4. (TCO G) The ABC Corporations budgeted monthly sales are $4,000. In the first...If you motive to get a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay