Question Details

(Solution Download) Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently a


 

 

 

 

 

 

 

Photochronograph Corporation (PC) manufactures time series

 

photographic equipment. It is currently at its target debt-equity

 

ratio of .59. ItAc??cs considering building a new $71 million

 

manufacturing facility. This new plant is expected to generate

 

aftertax cash flows of $7.85 million in perpetuity. There are three

 

financing options:

 

 

 

 

 

 

 

 

 

a.

 

A new issue of common stock: The required return on the

 

companyAc??cs new equity is 15.2 percent.

 

 

 

 

 

 

 

 

 

b.

 

A new issue of 20-year bonds: If the company issues

 

these new bonds at an annual coupon rate of 7 percent, they will

 

sell at par.

 

 

 

 

 

 

 

 

 

c.

 

Increased use of accounts payable financing: Because

 

this financing is part of the companyAc??cs ongoing daily business, the

 

company assigns it a cost that is the same as the overall firm

 

WACC. Management has a target ratio of accounts payable to

 

long-term debt of .11. (Assume there is no difference between the

 

pretax and aftertax accounts payable cost.)

 

 

 

 

 

 

 

 

 

 

 

Required:

 

If the tax rate is 35 percent, what is the NPV of the new plant?

 

(Do not round intermediate calculations. Enter your answer

 

in dollars, not millions of dollars (e.g., 1,234,567). Round your

 

answer to 2 decimal places (e.g., 32.16).)

 

 

 

 

 

 

 

 

 

  Net present

 

value

 

$   

 


Solution details:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Dec 08, 2020

PRICE: $15

Solution~000652147653972.zip (25.37 KB)

Buy this answer for only: $15

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free solution (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Dec 08, 2020

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.

Order Now