help with FIN assignment 6

bikchi

I need help with my week 6 assignment.

 

Capital Co. has a capital structure, based on current market values, that consists of 36 percent debt, 9 percent preferred stock, and 55 percent common stock. If the returns required by investors are 8 percent, 12 percent, and 16 percent for the debt, preferred stock, and common stock, respectively, what is Capital’s after-tax WACC? Assume that the firm’s marginal tax rate is 40 percent. (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)

After tax WACC=.

Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.00 million. This investment will consist of $2.90 million for land and $9.10 million for trucks and other equipment. The land, all trucks, and all other equipment is expected to be sold at the end of 10 years at a price of $5.25 million, $2.32 million above book value. The farm is expected to produce revenue of $2.04 million each year, and annual cash flow from operations equals $1.85 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 9 percent. Calculate the NPV of this investment. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)

NPV $.

 

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Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $1,641,294. have a life of five years, and would produce the cash flows shown in the following table.

YearCash Flow
1$562,618
2-279,566
3894,548
4674,557
5846,049


What is the NPV if the discount rate is 13.44 percent? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)

 

NPV is

$

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