A firm with a 10.5 percent cost of capital is considering a project for this year’s capital budget.  The project’s expected after-tax cash flows are as follows: Year: 0 1 2 3 4 Cash flow: -$14,000 $6,200 $4,900 $5,000 $5,300 Calculate the project’s profitability index (PI).

Spelling, punctuation, and accent mark count toward grading.  Misspelled, wrong tense, wrong form of verbal conjugation, article, or preposition (- full points worth). Missing accents from the words you have been exposed to during the chapter, and punctuation–periods, capital letters, upside-down exclamation or question marks–If needed (-1/4 points).   Accent Marks Please write me a short message, in parenthesis, next to the word that needs it, for instance: You need to write  ¡Mi mamá comprará el juguete mañana para Iván! You will write it like (upside-down exclamation mark) Mi mama (accent on the 2nd a) comprara (accent on the second a) el juguete manana (tilde over the 1st n) para Ivan (accent on a)! Notice that when there is more than one repeated vowel/consonant, I used more details on which vowel/consonant the accent mark was placed–mamá, mañana, etc. Unlike the name “Ivan” which has one accentuated vowel.   Directions: You will be given an English field of study. Your task is to change the English field of study into a Spanish field of study as you have learned in Quizlet. To earn full credit, it would be best to use the matching articles, such as “a,” “an” some,” etc.; and nouns/vocab when answering your task in Spanish.   The English field of study is “music” 1)    2) . (This is a two-word answer in Spanish. You must use a Spanish article). Do not write the whole answer in a single blank. Use one blank for each answer.

Directions Read the question and select your best answer to the question given.    Question The two best ways to communicate with your professor are:

A firm with a 12.5 percent cost of capital is considering a project for this year’s capital budget.  The project’s expected after-tax cash flows are as follows: Year: 0 1 2 3 4 Cash flow: -$9,000 $4,200 $3,100 $3,000 $4,300 Calculate the project’s payback period.

Broussard Industries plans to issue a $100 par perpetual preferred stock with a fixed annual dividend of 12 percent of par.  It would sell for $92.20, but flotation costs would be 5 percent of the market price.  What is the percentage cost of preferred stock after taking flotation costs into account?

A firm with a 10.5 percent cost of capital is considering a project for this year’s capital budget.  The project’s expected after-tax cash flows are as follows: Year: 0 1 2 3 4 Cash flow: -$11,000 $5,000 $5,300 $5,200 $5,000 Calculate the project’s discounted payback period.

The Yerby Company’s currently outstanding bonds have a 6.5 percent coupon and a 7.5 percent yield to maturity.  Yerby believes it could issue new bonds that would provide a similar yield to maturity.  If its marginal tax rate is 45 percent, what is Yerby’s after-tax cost of debt?

Spelling, punctuation, and accent mark count toward grading.  Misspelled, wrong tense, wrong form of verbal conjugation, article, or preposition (- full points worth). Missing accents from the words you have been exposed to during the chapter, and punctuation–periods, capital letters, upside-down exclamation or question marks–If needed (-1/4 points).   Accent Marks Please write me a short message, in parenthesis, next to the word that needs it, for instance: You need to write  ¡Mi mamá comprará el juguete mañana para Iván! You will write it like (upside-down exclamation mark) Mi mama (accent on the 2nd a) comprara (accent on the second a) el juguete manana (tilde over the 1st n) para Ivan (accent on a)! Notice that when there is more than one repeated vowel/consonant, I used more details on which vowel/consonant the accent mark was placed–mamá, mañana, etc. Unlike the name “Ivan” which has one accentuated vowel.   Directions: You will be given an English field of study. Your task is to change the English field of study into a Spanish field of study as you have learned in Quizlet. To earn full credit, it would be best to use the matching articles, such as “a,” “an” some,” etc.; and nouns/vocab when answering your task in Spanish.   The English field of study is “English”  1)     2) . (This is a two-word answer in Spanish. You must use a Spanish article). Do not write the whole answer in a single blank. Use one blank for each answer.

Danford Enterprises can invest in one of two mutually exclusive machines that will make a product it needs for the next 6 years.  Machine X costs $10 million but realizes after-tax inflows of $4.3 million per year for 3 years, after which it must be replaced.  Machine Y costs $16 million and realizes after-tax inflows of $4.6 million per year for 6 years.  Based on the firm’s cost of capital of 8 percent, the NPV of Machine Y is $5,265,246, with an equivalent annual annuity (EAA) of $1,138,954 per year.  Calculate the EAA of Machine X. Compare your result to that of Machine Y and decide which to recommend.

A firm with a 9 percent cost of capital is considering a project for this year’s capital budget.  The project’s expected after-tax cash flows are as follows: Year: 0 1 2 3 4 Cash flow: -$15,000 $5,600 $6,500 $4,800 $5,300 Calculate the project’s profitability index (PI).