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FIN 571 Week 5 DQ 1 NEW A postaudit review enables managers to determine whether a project's goals were met and to quantify the actual benefits or costs of the project. What are some other benefits of a post audit and ongoing reviews of capital projects?

FIN 571 Week 5 DQ 2 NEW Discuss why capital budgeting decisions are the most important investment decisions made by a firm's management.

FIN 571 Week 5 DQ 3 NEW The text discusses general rules for estimating incremental after-tax free cash flows. One rule is to include cash flows and only cash flows in your calculations. In other words, do not include allocated costs or overhead unless they reflect cash flows. What are some other rules to ensure the proper estimation of after-tax cash flows?

FIN 571 Week 5 DQ 4 NEW Describe how distinguishing between variable and fixed costs can be useful in forecasting operating expenses.

FIN 571 Week 5 Learning Team Reflection NEW Watch the "Concept Review Video: Cost of Capital" video located in the WileyPLUS Assignment: Week 5 Videos Activity. Discuss some of the corporate finance challenges faced by this company. YOU CAN ALSO VISIT: WWW.HWPROFILE.COM

Write a 350-700 word summary of your discussion. Click the Assignment Files tab to submit your assignment.

FIN 571 Week 5 WileyPLUS Assignment NEW Complete the following in WileyPLUS: •Problem 5.17 •Problem 5.21 •Problem 6.19 •Problem 6.27 •Problem 7.16 •Problem 8.24 •Problem 9.15

FIN 571 Week 5 WileyPLUS Practice Quiz NEW Multiple Choice Question 55 Genaro needs to capture a return of 40 percent for his one-year investment in a property. He believes that he can sell the property at the end of the year for $150,000 and that the property will provide him with rental income of $25,000. What is the maximum amount that Genaro should be willing to pay for the property? $137,500 $125,000 $112,500 $150,000

Multiple Choice Question 54 The process of identifying the bundle of projects that creates the greatest total value and allocating the available capital to the projects is known as risk analysis. YOU CAN ALSO VISIT: WWW.HWPROFILE.COM

rationing. capital rationing. budgeting.

Multiple Choice Question 78 Capital rationing. You are considering a project that has an initial cost of $1,200,000. If you take the project, it will produce net cash flows of $300,000 per year for the next six years. If the appropriate discount rate for the project is 10 percent, what is the profitability index of the project? 2.09 0.09 1.09 2.18

Multiple Choice Question 89 What might cause a firm to face capital rationing? If a firm rejects some capital investments that are expected to generate positive NPV’s. If investors require returns for their capital that are too high. If a firm has more than one project with a positive NPV. If a firm has several projects that are expected to generate negative IRR’s.

Multiple Choice Question 59 How firms estimate their cost of capital: The WACC for a firm is 19.75 percent. You know that the firm is financed with $75 million of equity and $25 million of debt. The cost of debt capital is 7 percent. What is the cost of equity for the firm? 19.75% 32.50% 24.00% YOU CAN ALSO VISIT: WWW.HWPROFILE.COM


Multiple Choice Question 61 The cost of debt: Bellamee, Inc., has semiannual bonds outstanding with five years to maturity and are priced at $920.87. If the bonds have a coupon rate of 7 percent, then what is the YTM for the bonds? 4.5% 9.0% 7.0% 9.2%

Multiple Choice Question 63 The cost of debt: Beckham Corporation has semiannual bonds outstanding with 13 years to maturity and are currently priced at $746.16. If the bonds have a coupon rate of 8.5 percent, then what is the after-tax cost of debt for Beckham if its marginal tax rate is 35%? Assume that your calculation is made as on Wall Street 8.125% 12.890% 6.250% 12.500%

Multiple Choice Question 67 The cost of equity: RadicalVenOil, Inc., has a cost of equity capital equal to 22.8 percent. If the risk-free rate of return is 10 percent and the expected return on the market is 18 percent, then what is the firm's beta if the firm's marginal tax rate is 35 percent? 4.10 1.0 1.28 1.60 YOU CAN ALSO VISIT: WWW.HWPROFILE.COM

Multiple Choice Question 83 Which type of project do financial managers typically use the highest cost of capital when evaluating? New product projects Efficiency projects Market expansion projects Extension projects


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