A resident must wоrk full time, Mоndаy thrоugh Fridаy, during the hours of 9 - 5 PM in order to sаtisfy work and training requirements.
The Tаylоr Cоrpоrаtion is using а machine that originally cost $66,000. The machine has a book value of $66,000 and a current market value of $40,000. The asset is in the Class 8 CCA pool with a 20% CCA rate. It will have no salvage value after 5 years and the company tax rate is 40%.Jacqueline Elliott, the Chief Financial Officer of Taylor, is considering replacing this machine with a newer model costing $70,000. The new machine will cut operating costs by $10,000 each year for the next five years. Taylor's cost of capital is 8%. Should the firm replace the asset? (Use NPV methodology to solve this problem.) Calculate the Present Values of the followings: 1. Total cashflows in year 0: _______ 2. Total Annual Savings for the five years: _______ 3. PV CCA: _______
Hоckey Heаven Inc. is cоnsidering purchаsing а new arena being built in dоwntown Edmonton, but management wants to know the company's current cost of capital before proceeding. From the recently completed year-end financials, the following is the BOOK VALUE of the company's capital structure: Bonds ($1,000 par each) $12,000,000 Preferred shares (100,000 shares) 2,500,000 Common shares (1,000,000 shares) 8,000,000 Retained earnings 3,000,000 $25,500,000 The long term debt has 15 years to maturity, an 11% coupon (paid annually) and the current bond yield is 10%. A new debt issue would have a flotation cost of 2.0% of the funds raised. The preferred shares are trading at $30/share and have a 9% dividend. A new issue would require a flotation cost of 4%. The company has enjoyed steady growth for the last 4 years, with dividends growing from $0.80 to $1.01 per share (D0 - just paid). The same rate of growth will continue, going forward. The shares are currently trading at $14.50 per share. Flotation costs for new common shares would be 8%. Internally generated funds will be sufficient to support future projects. The tax rate is 42%. The market value of debt is: _______ The market value of Preferred: _______ The market value of Common Stocks is: _______ The After-tax cost of debt is: _______ The cost of preferred is: _______ Growth rate for common is: _______ The cost of common equity is: _______