Eun Topic The Adjusted Present Value Model 27 Using the APV

Eun topic the adjusted present value model 27 using

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Eun - Chapter 18 #26 Topic: The Adjusted Present Value Model 27. Using the APV method, what is the value of this project to an all-equity firm? A. -$46,502,288.10 B. $12,494,643.75 C. $36,580,767.55 D. -$67,163,445.12 E. $59,459,301.03 The firm will partially finance the project with an 8% interest-only 4-year loan. Eun - Chapter 18 #27 Topic: The Adjusted Present Value Model 28. Using the APV method, what is the value of the debt side effects? A. $239,072,652.70 B. $66,891,713.66 C. $59,459,301.03 D. $660,000,000 E. None of the above The firm will partially finance the project with an 8% interest-only 4-year loan. Eun - Chapter 18 #28 Topic: The Adjusted Present Value Model
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Consider a project of the Cornell Haul Moving Company, the timing and size of the incremental after- tax cash flows (for an all-equity firm) are shown below in millions: The firm's tax rate is 34%; the firm's bonds trade with a yield to maturity of 8%; the current and target debt-equity ratio is 3; if the firm were financed entirely with equity, the required return would be 10%. Eun - Chapter 18 29. Using the weighted average cost of capital methodology, what is the NPV? I didn't round my intermediate steps. If you do, you're not going to get the right answer. A. -$1,406,301.25 B. $12,494,643.75 C. $36,580,767.55 D. $108,994.618.20 E. $59,459,301.03 Eun - Chapter 18 #29 Topic: The Adjusted Present Value Model 30. What is the levered after-tax incremental cash flow for year 2? A. $185,796,000 B. $215,152,000 C. $267,952,000 D. $284,848,000 E. None of the above The firm will partially finance the project with an 8% interest-only 4-year loan. Eun - Chapter 18 #30 Topic: The Adjusted Present Value Model 31. What is the levered after-tax incremental cash flow for year 4? A. -$281,704,000 B. $465,152,000 C. -$194,848,000 D. $460,796,000 E. None of the above The firm will partially finance the project with an 8% interest-only 4-year loan. Eun - Chapter 18 #31 Topic: The Adjusted Present Value Model 32. Using the flow to equity methodology, what is the value of the equity claim? A. -$1,540,000 B. $446,570,866.00 C. $36,580,767.55 D. $470,953,393.70 E. $30,716,236.13 The firm will partially finance the project with an 8% interest-only 4-year loan. Eun - Chapter 18 #32 Topic: The Adjusted Present Value Model
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33. Using the APV method, what is the value of this project to an all-equity firm? A. -$46,502,288.10 B. $12,494,643.75 C. $36,580,767.55 D. -$67,163,445.12 E. $59,459,301.03 The firm will partially finance the project with an 8% interest-only 4-year loan. Eun - Chapter 18 #33 Topic: The Adjusted Present Value Model 34. Using the APV method, what is the value of the debt side effects? A. $239,072,652.70 B. $66,891,713.66 C. $59,459,301.03 D. $660,000,000 E. None of the above The firm will partially finance the project with an 8% interest-only 4-year loan. Eun - Chapter 18 #34 Topic: The Adjusted Present Value Model 35. In the APV model A. interest tax shields are discounted at i . B. operating cash flows are discounted at K u . C. depreciation tax shields are discounted at i . D. all of the above Eun - Chapter 18 #35 Topic: The Adjusted Present Value Model 36. Your firm's existing bonds trade with a yield to maturity of eight percent. The state of Missouri has offered to loan your firm $10,000,000 at zero percent for five years. Repayment will be of the form of $2,000,000 per year for five years, the first payment is due in one year. What is the value of this offer?
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