Using the following data: (Pleae prove answers in excel spreadship & show calculations) • Initial Investment =...

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Finance

Using the following data: (Pleae prove answers in excelspreadship & show calculations)
• Initial Investment = $10,000,000
• Cash Inflow – Year 1 = $3,000,000
• Cash Inflow – Year 2 = $3,500,000
• Cash Inflow – Year 3 = $4,000,000
• Cash Inflow – Year 4 = $4,900,000
• Cash Inflow – Year 5 = $5,000,000
a. Calculate Internal Rate of Return b. Calculate Net PresentValue (assuming a required return of 8%)
2). Using the following data:
• Debt o Market value - $7,000,000 o Current yield to maturity –8%
• Equity o Market value - $35,000,000
• Tax rate – 35%
• Expected return on market – 10%
• Current 10 year US Treasury – 2.3%
• Beta – 1.60 Calculate weighted average cost of capital
3). Using the following free cash flow data:
Year Cash Flow 2017 $4,000,000
Year Cash Flow 2018 $4,400,000
a. Prepare a 10-year cash flow forecast based upon the rate ofgrowth in cash flow between 2017 and 2018.
b. Calculate the net present value of the forecasted cash flowsassuming an immediate investment cost of $18,500,000
4. Estimate cost of capital using the following data:
• Market value of debt - $600,000
• Market value of equity - $1, 400,000
• Current yield on debt – 7.3%
• Tax rate – 35%
• Expected market return – 12%
• Current 10 year US Treasury – 3.8%
• Beta – 2.1

Answer & Explanation Solved by verified expert

3.9 Ratings (619 Votes)

As multiple questions are asked answering the first question 1 a Calculating IRR by using trial and error as Internal rate of return is the interest that makes the NPV zero Formula for PV Future value 1 rn NPV Cash inflow Cash outflow Using interest rate as 20 Cash See Answer

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Using the following data: (Pleae prove answers in excelspreadship & show calculations)• Initial Investment = $10,000,000• Cash Inflow – Year 1 = $3,000,000• Cash Inflow – Year 2 = $3,500,000• Cash Inflow – Year 3 = $4,000,000• Cash Inflow – Year 4 = $4,900,000• Cash Inflow – Year 5 = $5,000,000a. Calculate Internal Rate of Return b. Calculate Net PresentValue (assuming a required return of 8%)2). Using the following data:• Debt o Market value - $7,000,000 o Current yield to maturity –8%• Equity o Market value - $35,000,000• Tax rate – 35%• Expected return on market – 10%• Current 10 year US Treasury – 2.3%• Beta – 1.60 Calculate weighted average cost of capital3). Using the following free cash flow data:Year Cash Flow 2017 $4,000,000Year Cash Flow 2018 $4,400,000a. Prepare a 10-year cash flow forecast based upon the rate ofgrowth in cash flow between 2017 and 2018.b. Calculate the net present value of the forecasted cash flowsassuming an immediate investment cost of $18,500,0004. Estimate cost of capital using the following data:• Market value of debt - $600,000• Market value of equity - $1, 400,000• Current yield on debt – 7.3%• Tax rate – 35%• Expected market return – 12%• Current 10 year US Treasury – 3.8%• Beta – 2.1