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##### Financial management and review

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solution

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I just need to know what inputs you placed into the calculator to get the final answer. Thanks again. That's how I show my work.;Attachments Preview;Final_FINC501_Online_Fall14.docx Download Attachment;Financial Management (ONLINE), FINC-501;Final;Instructions;Please write legibly all your answers.;Please use at least 4 decimal places accuracy.;Please show all the inputs entered in financial calculator.;Partial credit will be given if the procedure is correct but the answer is wrong.;The process is graded. So, the correct answer without supporting work is of little value.;Good Luck!;1. Famas has a WACC of 9.8%. The companys cost of equity is 13%, and its cost of debt is;6.5%. The tax-rate is 35%. What is Famas of debt-equity ratio?;2. Your friend asks you to invest $10,000 in a business venture. Based on your estimates;you would receive nothing for four years, at the end of year 5 you would receive interest;on the investment compounded annually at 8%, and at the end of year 6 you would;receive $14,500. If your estimates are correct, what would be the IRR on this;investment?;3. Hook Industries capital structure consists of solely debt and equity. It can issue debt at rd;=11% and its common stock currently pays a dividend of $2 per share. The stocks;current price is $24.75, its dividend is expected to grow at a constant rate of 7% per year;its tax rate is 35% and its WACC is 13.95%. What percentage of the firms capital;structure consists of debt?;4. Project S has a cost of $10,000 and is expected to produce cash flows of $3000 per year;for 5 years. Project L has a cost of $25,000 and is expected to produce cash flows of;$7400 for 5 years. Calculate the NPV and IRR of the two projects assuming a cost of;capital of 12%. Which project would you select, assuming they are mutually exclusive;using each ranking method?;View Full Attachment;PS5.docx Download Attachment;Problem Set-5;1. Your friend asks you to invest $10,000 in a business venture. Based on your estimates;you would receive nothing for four years, at the end of year 5 you would receive interest;on the investment compounded annually at 8%, and at the end of year 6 you would;receive $14,500. If your estimates are correct, what would be the IRR on this;investment?;2. Hook Industries capital structure consists of solely debt and equity. It can issue debt at rd;=11% and its common stock currently pays a dividend of $2 per share. The stocks;current price is $24.75, its dividend is expected to grow at a constant rate of 7% per year;its tax rate is 35% and its WACC is 13.95%. What percentage of the firms capital;structure consists of debt?;3. Davis industries has to decide between a gas vs. electric powered forklift truck. The;electric powered truck will cost $22,000 where as gas powered truck costs $17,500. The;cost of capital is 12%. The life of both the trucks is 6 years. The net cash-flows from;electric powered tuck will be $6,290 per year and $5,000 for the gas powered truck. The;firm will choose only one of these trucks. Calculate NPV and IRR for each truck and;make your recommendation.

Paper#17921 | Written in 18-Jul-2015

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