P9-7 Net present value. Quark Industries has a project with the following projected cash”� flows: a.”�”�Using a discount rate of 9″�% for this project and the NPV”� model, determine whether the company should accept or reject this project. b.”�”�Should the company accept or reject it using a discount rate of 17″�%? c.”�”�Should the company accept or reject it using a discount rate of 18″�%? P9-8 (similar to) Net present value. Lepton Industries has a project with the following projected cash”� flows: Initial”� cost: “�$470,000 Cash flow year”� one: “�$121,000 Cash flow year”� two: “�$260,000 Cash flow year”� three: “�$181,000 Cash flow year”� four: “�$121,000 a.”�”�Using a discount rate of 9″�% for this project and the NPV”� model, determine whether the company should accept or reject this project. b.”�”�Should the company accept or reject it using a discount rate of 14″�%? c.”�”�Should the company accept or reject it using a discount rate of 21″�%? P16-5 (similar to) “�Break-even EBIT”� (with and without “�taxes).”�”�Alpha Company is looking at two different capital”� structures, one an”� all-equity firm and the other a levered firm with “�$4.8 million of debt financing at 7″�% interest. The”� all-equity firm will have a value of “�$8 million and 400,000 shares outstanding. The levered firm will have 160,000 160,000 shares outstanding. a.”�”�Find the”� break-even EBIT for Alpha Company using EPS if there are no corporate taxes. b.”�”�Find the”� break-even EBIT for Alpha Company using EPS if the corporate tax rate is 15″�%. c.”�”�What do you notice about these two”� break-even EBITs for Alpha”� Company? P7-1 (similar to) Anderson”� Motors, Inc. has just set the company dividend policy at “�$0.85 per year. The company plans to be in business forever. What is the price of this stock if a.”�”�an investor wants a return of 4″�%? b.”�”�an investor wants a return of 7″�%? c.”�”�an investor wants a return of 9″�%? d.”�”�an investor wants a return of 16″�%? e.”�”�an investor wants a return of 18″�%? P7-2 (similar to) Dietterich Electronics wants its shareholders to earn a return of 9″�% on their investment in the company. At what price would the stock need to be priced today if Dietterich Electronics had a a.”�”�”�$0.40 constant annual dividend”� forever? b.”�”�”�$1.10 constant annual dividend”� forever? c.”�”�”�$1.60 constant annual dividend”� forever? d.”�”�”�$2.90 constant annual dividend”� forever?
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