Problem 6-32, Hayden Inc.
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Calculate the equivalent annual cost of the copiers for Hayden Inc., and determine when Hayden should replace its copiers.
Calculate the equivalent annual cost of the copiers for Hayden Inc., and determine when Hayden should replace its copiers.
Given the cash inflows from existing equipment, the cost of a new machine, the cash flow of the new machine, life, and discount rate… find the equivalent cost of the purchase along with whether they should replace equipment now or later.
Given the life left for a forklift, the cost to maintain, cost and life of a new forklift, and maintenance costs… determine whether they should replace the machine or not under two different discount rates, or postpone the replacement.
They give you information regarding the use of the president’s private jet and the additional costs that would occur and ask you to determine whether you should try to persuade the president to allow officers to use the jet.
Given the market index level at the beginning and end of the year, the dividend yield, interest rate, and inflation rate… determine the return on the index, risk premium, and real return.
Given the rate of return and inflation rate for two different countries… calculate the real rate of return and determine who’s is higher.
Given a grid of numbers with the inflation rates, stock market return, and t-bill return for five years… find the real return and risk premium for each year along with their averages.
Given a scenario with required return now, required in the past, and a change in value in the market portfolio… determine if the stock prices will rise or fall by that amount.
Given the amount that each game costs along with the probability of certain payouts and net profits… calculate the expected cash payoff, rate of return, variance, and standard deviation.
Given nominal returns and inflation rates for six consecutive years… determine the standard deviation and average real return.