FINALstudyGuideFIN120

FINALstudyGuideFIN120 - F inal Study Guide F in 120 C...

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Final Study Guide Fin 120 CHAPTER 10 1) When evaluating this project what is the IRR? Year Project 0 (250) 1 50 2 75 3 145 4 212 5 225 Cash flow CF button 250 Negitive Enter Down arrow CO 1 50 enter Down arrow FO 1 Down CO 2 75 Enter Down, Down 145 enter
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down, down 212, enter CPT IRR= ANSWER 35.19 2. Required rate of return is 10% NPV? Year Project 0 (250) 1 50 2 75 3 145 4 212 5 225 CF 250 negitive Down arrow 50 enter down down 75 enter down down 145 enter ….. CPT NPV I= rate of return 10.00 enter down , CPT NPV = ANSWER
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3. A form has determined its cost for each source of capital which is composed of the following target market value proportions . source target mkt before tax Long term debt 300,000 .30 12% Pref stock 300,000 .30 9% Common equity 400,000 .40 10% 1,000,000 Tax rate 40% the weighted average is …. = .30 (.12(1-.40)) + .30(.09) + .40(.1) = .09 or 9% **** Only debt is tax deductable not equity CHAPTER 13 Weight 4. When evaluation project what is its payback period
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Year project
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FINALstudyGuideFIN120 - F inal Study Guide F in 120 C...

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