Answer:
$78.0 million
Explanation:
Cost of repurchase = Number of shares*Share price/(1-1%)
Cost of repurchase = $3,352,720 * $23.02/(1-1%)
Cost of repurchase = $3,352,720 * $23.02/(1 - 0.01)
Cost of repurchase = $3,352,720 * $23.02/0.99
Cost of repurchase = $3,352,720 * $23.25
Cost of repurchase = $
77,950,740
Cost of repurchase = $78.0 million
Answer:
- The modified internal rate of return for PROJECT A:
b. 24.18%
- The internal rate of return for Project B :
b. 35.27%.
Explanation:
The mean difference between the MIRR and the IRR it's that the IRR assumes that the obtained positive cash flows are reinvested at the same rate at which they were generated, while the MIRR considers that these cashflow will be reinvested at the external rate of return, this case 10%.
Project A Y1 Y2
-$95,000 $65,000 $75,000
24,18% MIRR
Project B -$120,000
Y 1 $64,000
Y 2 $67,000
Y 3 $56,000
Y 4 $45,000
TIR 35,27%
Answer:
The second alternative is the best option for the borrower as it provides the less amount of interest expense.
Explanation:
We solve for the interest expense on each alternative and pick the lowest:
(1) common note.
Principal 420,000.00
time 0.25
rate 0.04000
Amount 424,138.43
Interest expense: 4,138.43
(2) Discounted note:
Maturity $420,000.00
time 0.25
rate 0.04000
PV 415,901.9490
THe borrower recieve this amount and then, return 420,000
Interest over time 4,098.05099
your answer should be 12 !
Hope this helped, good luck in your future studies..
-A
