Week 1

Final Exam Page 1 1. (TCO A) Which of the pursual does NOT eternally increase a comp eachs market value? (Points : 5) Increasing the inhabit growth crop of sales Increasing the expected operating(a) favourableness (NOPAT/Sales) Decreasing the capital requirements (Capital/Sales) Decreasing the weighted bonnie embody of capital Increasing the expected rate of government issue 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 coalesce cash flows at the regular IRR to aline the TV, and so we brush aside the TV at the WACC to find the PV. The NPV and IRR manners both tangle with that cash flows can be reinvested at the WACC. However, the MIRR method assumes reinvestment at th e MIRR itself. If ii projects hold the same cost, and if their NPV profiles cross in the upper correctly quadrant, then the project with the naughtyer IRR credibly has to a greater extent of its cash flows approaching 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 youthful product. Management expects si moleons and dividends to grow at a rate of 2! 5% for the next 4 years, after which arguing will 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 subvention is 5.50%, and the risk-free rate is 3.00%. What is the current price of the vernacular decline? 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 urgency to get a full essay, order it on our website: BestEssayCheap.com

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