Assume an investment will generate cash flows at the end of…

Assume an investment will generate cash flows at the end of Years 1 through 3 equal to $200, $300, and $500, respectively; from that point, the investment begins to generate a series of constant-growth perpetual cash flows. Calculate the present value of these cash flows at the end of Year 0, assuming a discount rate of 7% and a 2% constant growth rate for the perpetuity. Calculate the present value weighted average growth rate for this investment.  [a] [b]

Assume Company A that operates in the transportation equipme…

Assume Company A that operates in the transportation equipment industry and has an estimated equity beta of [Ab] is planning to merge with Company B that operates in the trucking and warehousing industry and has an estimated equity beta of [Bb]. At the time of the announcement of the merger, Company B’s equity was twice the market value of Company A’s equity. Estimate the combined firm’s equity beta after the merger, assuming that debt in the merged entity will be equal to the pre-merger debt of Company A and Company B combined and the merger is not expected to create or destroy value. Round your answer to two decimal places.

The below diagram represents the outcomes of a firm that is…

The below diagram represents the outcomes of a firm that is operating in a purely competitive industry. Need ALT text   Suppose that costs associated with commodities remain unchanged but technology prices decrease, having a combined effect of shifting only the ATC schedule down. Calculate the economic or pure profit for this firm if the red line shifts down by $ [a] at each possible level of output. Please enter the answer using 2 decimal places, rounding up if the 3rd decimal place is 5 or higher.  Do not enter units. Do not enter “$”.

12.  Piper Corp. is operating at 70% of capacity and is curr…

12.  Piper Corp. is operating at 70% of capacity and is currently purchasing a part used in its manufacturing operations for $24 per unit. The unit cost for the business to make the part is $36, including fixed costs, and $26, not including fixed costs. If 15,000 units of the part are normally purchased during the year but could be manufactured using unused capacity, the amount of differential cost increase or decrease from making the part rather than purchasing it would be a