Marko, Inc. is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $5,000, $9,000, and $15,000 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determined that a 14 percent rate of return is applicable to this potential purchase. the value of the cash flow stream in(1). year 0 (today) ? year 2?

Your company seeks to take over Good Deal Company. Your company’s offer for Good Deal is $3,000,000 in cash upon signing the agreement followed by 10 annual payments of $300,000 starting one year later. The time value of money is 10%. Find the present worth of your company’s offer and perform a sensitivity analysis with a graph in excel i.e. find how sensitive the value of the present worth is to changes in the initial cash upon signing, amount of payments, their frequency and rate of return.

Beyer Company's is considering the purchase of an asset for $205,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer requires a 12% return on invetsments. (PV of $1, FV of $1, PVA of $1, and FVA of $1.  Net cash flows (Year 1 $70,000, Year 2 $50,000. Year 3 $88,000, Year 4 $159,000 and Year 5 $53,000. A. Compute the net present value of this investment B. Should Beyer accept the investment?

Your company seeks to take over Good Deal Company. Your company’s offer for Good Deal is $3,000,000 in cash upon signing the agreement followed by 10 annual payments of $300,000 starting one year later. The time value of money is 10%. Find the present worth of your company’s offer and perform a sensitivity analysis i.e. find how sensitive the value of the present worth is to changes in the initial cash upon signing, amount of payments, their frequency and rate of return.

Dalvi Incorporated is considering a new Investment. The table below lists the cash flows. Year Cash Flows -$25,400 1 $6,300 2 $7,700 3 $11,400 Calculate the Payback period Calculate the NPV and IRR. Assume that the interest rate is 0%.

You invest $600,000 in cash to become the sole shareholder in a new company. With the $600,000, you purchase a single asset. The asset is non depreciating and requires no maintenance. Further, the company requires no investment in working capital. Based on your analysis, the asset will produce end of year, after tax free cash flow of $200,000 / year for the next 20 years. The appropriate risk-adjusted discount rate for these cash flows is an EAR of 7.5%. If correct, what's the book to market ratio for the value of the equity in your company?

You are offered a chance to buy an asset for $7,250 that is expected to produce cash flows of $750 at the end of Year 1, $1,000 at the end of Year 2, $850 at the end of Year 3, and $6,250 at the end of Year 4. What rate of return would you earn if you bought this asset? a. 5.19% b. 5.46% Ⓒc. 6.05% d. 5.75% e. 4.93%

Beyer Company is considering the purchase of an asset for $240,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Net cash flows Year 0 1 2 3 4 5 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.) $ Cash Inflow (Outflow) (240,000) Year 1 $60,000 Payback period = Year 2 $36,000 Cumulative Net Cash Inflow (Outflow) Year 3 $60,000

A research analyst wants to use the discounted free cash flow model to determine the enterprise value of Machinex Ltd, a heavy machinery manufacturing company. The analyst has put together the following forecast of Machinex's income statement over the next three years (all figures in $ million): All figures in $ million Financial year ending 31 March 2024 2025 Revenue 180.0 Less: Operating expenses 120.0 Operating earnings before depreciation 60.0 Less: Depreciation 30.0 Earnings before interest and tax (EBIT) 30.0 5.0 25.0 7.0 18.0 Less: Interest expense Earnings before tax Less: Tax expense Net profit (earnings) 2026 200.0 240.0 128.0 145.0 72.0 95.0 25.0 20.0 47.0 75.0 5.0 5.0 42.0 70.0 11.8 19.6 30.2 50.4 In addition, the analyst has determined that: Operating working capital (OWC) in each year will be 15% of revenue in that year Capital expenditure (capex) will be $30 million in each year The corporate tax rate is 28%. . Machinex's free cash flow to the firm (FCF) in year 2026 is…

An ongoing business should be able to produce cash flows as listed below. It's offered for sale at a price of $1.5 million, and most interested buyers understand the current owner will unlikely accept anything less. If an appropriate opportunity cost of money is 9.0%, what is the value of this business for anyone who buys today from the owner? Year 1 – $305,000 Year 2 – $327,000 Year 3 – $348,500 Year 4 – $385,000 Year 5 – $422,000