# Finance- Find the Modified Internal Rate of Return (MIRR) for the following annual series of cash flows

1) Find the Modified Internal Rate of Return (MIRR) for the following annual series of cash flows, given a discount rate of 10.50%: Year 0: -$75,000; Year 1: $15,000; Year 2: $16,000; Year 3: $17,000; Year 4: $17,500; and, Year 5: $18,000.2) Pie, Inc. is considering an eight-year project that has an initial after-tax outlay or after-tax cost of $180,000. The future after-tax cash inflows from its project for years 1 through 8 are the same at $38,000. Pie uses the net present value method and has a discount rate of 11.50%. Calculate the Net Present Value of the project. Will Pie accept the project?3) Consider the following four-year project. The initial outlay or cost is $180,000. The respective cash inflows for years 1, 2, 3 and 4 are: $100,000, $80,000, $80,000 and $20,000. What is the discounted payback period if the discount rate is 11%?4) Bald Eagle Co. purchases an asset for $50,000. This asset qualifies as a five-year recovery asset under MACRS, with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Bald Eagle has a tax rate of 35%. If the asset is sold at the end of four years for $5,000, what is the after-tax cash flow from disposal?5) KKOL, Inc. has just issued a 10-year $1,000.00 par value, 10% annual coupon bond for a net price of $964.00. The tax rate is 30%. What is the after-tax cost of debt financing? Use a financial calculator or Excel to determine your answer.6) The following information comes from the Galaxy Way Construction balance sheet. The value of common stock is $10,000, retained earnings equals $7,000, total common equity equals $17,000, preferred stock has a value of $3,000, and long-term debt totals $15,000. If the cost of debt is 8.00%, preferred stock has a cost of 10.00%, common stock has a cost of 12.00%, and the firm has a corporate tax rate of 30%, calculate the firm’s WACC adjusted for taxes.7) Use the dividend growth model to determine the required rate of return for equity. Your firm has just paid a dividend of $1.50 per share, has a recent price of $31.82 per share, and anticipates a growth rate in dividends of 4.00% per year for the foreseeable future.8) The following market information was gathered for the Blender Corporation. The firm has 1,000 bonds outstanding, each selling for $1,100.00 with a required rate of return of 8.00%. Blenders has 5,000 shares of preferred stock outstanding, selling for $40.00 per share and 50,000 shares of common stock outstanding, selling for $18.00 per share. If the preferred stock has a required rate of return of 11.00% and the common stock requires a 14.00% return, and the firm has a corporate tax rate of 30%, then calculate the firm’s WACC adjusted for taxes.9) T-short Unlimited, Inc., an on line retailer of t-shirts, orders 100,000 t-shirts per year from its manufacturer. T-short Unlimited plans on ordering t-shirts 12 times over the next year. T-short Unlimited receives the same number of t-shirts each time it orders. The carrying cost is $0.10 per shirt per year. The order cost is $500 per order. What is the annual ordering cost of the t-shirt inventory (rounded to the nearest dollar)? 32) ______10) Canada Forest Mills Inc. has credit terms of 2/10 net 60. Customers should take the discount and pay in 10 days if they CANNOT earn more than ________ (APR) or ________ (EAR) on their investments.11) Plum Electronics Inc. has a profitability ratio of 0.14, an asset turnover ratio of 1.7, a debt to equity ratio of 0.60 and a total asset to equity ratio of 1.60. What is the firm’s ROE?Consider the information below from a firm’s balance sheet for 2011 and 2012. All the work has to be shown!Current Assets 2012 2011 ChangeCash and Equivalents $1,561 $1,800 -$ 239Short-Term Investments $1,052 $3,010 -$ 1,958Accounts Receivable $3,616 $3,129 $ 487Inventories $1,816 $1,543 $ 273Other Current Assets $ 707 $ 601 $ 106Total Current Assets $8,752 $10,083 -$1,331Current LiabilitiesAccounts Payable $5,173 $5,111 $ 62Short-Term Debt $ 288 $ 277 $ 11Other Current Liabilities $1,401 $1,098 $ 303Total Current Liabilities $6,862 $6,486 $ 37612) Assuming the Operating Cash Flows (OCF) are $7,155 and the Net Capital Spending (NCS) is $2,372, what is the Cash Flow from Assets?

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