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MBA,MCS,M.phil
Devry University
Jan-2008 - Jan-2011
MBA,MCS,M.Phil
Devry University
Feb-2000 - Jan-2004
Regional Manager
Abercrombie & Fitch.
Mar-2005 - Nov-2010
Regional Manager
Abercrombie & Fitch.
Jan-2005 - Jan-2008
Your company currently has a debt-to-total assets ratio of 0.35. Additionally, your company has a tax rate of 32%, a beta of 1.2, and no preferred stock outstanding. Your companyAc€?cs bonds have a 5% coupon rate, a yield to maturity rate of 8.5% and mature in 5 years. Currently, a five-year Treasury note is yielding 1.25% and the historic return on the S&P 500 is 11.5 percent. What is our companyAc€?cs weighted average cost of capital (WACC)?
Find the NPV, IRR, Payback Period, Discounted Payback Period, Profitability Index, and MIRR (assuming that funds are reinvested at WACC) for the following projects. Use the WACC found in question one.
Projects |
Year 0 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Project A |
-250 |
0 |
0 |
100 |
500 |
1,000 |
Project B |
-600 |
100 |
150 |
300 |
150 |
100 |
Project C |
-150 |
50 |
50 |
50 |
50 |
50 |
 |
Project A |
Project B |
Project C |
NPV |
 |  |  |
IRR |
 |  |  |
MIRR |
 |  |  |
PI |
 |  |  |
Payback Period |
 |  |  |
Discounted Payback |
 |  |  |
Accept or Reject |
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