Questions from Corporate Finance


Q: You own a car dealership and are trying to decide how to

You own a car dealership and are trying to decide how to configure the showroom floor. The floor has 2000 square feet of usable space. You have hired an analyst and asked her to estimate the NPV of pu...

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Q: Kaimalino Properties (KP) is evaluating six real estate investments.

Kaimalino Properties (KP) is evaluating six real estate investments. Management plans to buy the properties today and sell them five years from today. The following table summarizes the initial cost a...

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Q: Your firm is considering the launch of a new product, the

Your firm is considering the launch of a new product, the XJ5. The upfront development cost is $10 million, and you expect to earn a cash flow of $3 million per year for the next five years. Plot the...

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Q: Bill Clinton reportedly was paid $15 million to write his book

Bill Clinton reportedly was paid $15 million to write his book My Life. Suppose the book took three years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given h...

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Q: Fast Track Bikes, Inc. is thinking of developing a new

Fast Track Bikes, Inc. is thinking of developing a new composite road bike. Development will take six years and the cost is $200,000 per year. Once in production, the bike is expected to make $300,000...

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Q: Open Seas, Inc. is evaluating the purchase of a new

Open Seas, Inc. is evaluating the purchase of a new cruise ship. The ship would cost $500 million, and would operate for 20 years. Open Seas expects annual cash flows from operating the ship to be $70...

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Q: You are CEO of Rivet Networks, maker of ultra-high

You are CEO of Rivet Networks, maker of ultra-high performance network cards for gaming computers, and you are considering whether to launch a new product. The product, the Killer X3000, will cost $90...

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Q: You are considering an investment in a clothes distributor. The company

You are considering an investment in a clothes distributor. The company needs $100,000 today and expects to repay you $120,000 in a year from now. What is the IRR of this investment opportunity? Given...

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Q: Using the assumptions in part (a) of Problem 5 (

Using the assumptions in part (a) of Problem 5 (assuming there is no cannibalization), a. Calculate Home Net’s net working capital requirements (that is, reproduce Table 8.4 under the assumptions in P...

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Q: The following quote on Yahoo! stock appeared on July 23,

The following quote on Yahoo! stock appeared on July 23, 2015, on Yahoo! Finance: If you wanted to buy Yahoo!, what price would you pay? How much would you receive if you wanted to sell Yahoo!?

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