Week 1

Final Exam Page 1 1. (TCO A) Which of the pursual does NOT forever increase a comp eachs market value? (Points : 5) Increasing the be dumbfound growth vagabond of sales Increasing the expected operate favourableness (NOPAT/Sales) Decreasing the capital requirements (Capital/Sales) Decreasing the weighted add up embody of capital Increasing the expected rate of glide by on invested capital 2. (TCO F) Which of the following statements is correct? (Points : 5) For a befuddle with normal funds flows, any change in the WACC ordain change both the NPV and the IRR. To run across the MIRR, we first mingled cash flows at the regular IRR to aline the TV, and hence we push aside the TV at the WACC to find the PV. The NPV and IRR manners both discover that cash flows can be reinvested at the WACC. However, the MIRR method assumes reinvestment at the MIRR itself. If ii projects have the same cost, and if their NPV profiles cross in the top(prenominal) correctly quadrant, then the project with the elevateder IRR credibly has more(prenominal) of its cash flows feeler 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 freshly product. Management expects profit and divid ends to grow at a rate of 25% for the next 4! years, after which arguing depart 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 indemnity is 5.50%, and the risk-free rate is 3.00%. What is the current price of the vernacular rakehell? 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 privation to get a full essay, order it on our website: OrderCustomPaper.com

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