Questions 1 and 2 are based on the following scenario: Neptune Biometrics, despite its promising technology, is having difficulty generating profits. Having raised $85 million in an initial public...

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please look at the attachment, and when you are done attach the excel file as well that contains the work. and thank you so much.


Questions 1 and 2 are based on the following scenario: Neptune Biometrics, despite its promising technology, is having difficulty generating profits.  Having raised $85 million in an initial public offering of its stock early in the year, the company is poised to introduce a new product, an inexpensive fingerprints door lock. If Neptune engages in a promotional campaign costing $55 million this year, its annual after-tax cash flow over the next five years will be only $1 million.  If it does not undertake the campaign it expects its after-tax cash flow to be -$15 million annually for the same period.  Question 1:  What is the Net Present Value of the decision to engage inn the $55 million marketing campaign Question 2: Would you undertake this marketing campaign?  Why or Why not.  Use your answer to also show the work for your analysis in question.  Use the following table to answer Questions 3 through 6.   Investment  A B C Initial Cost  $5,500,000 $3,000,000 $2,000,000 Expected Life 10 years 10 years 10 years NPV @ 15% discount rate $340,000 $300,000 $200,000 IRR 20% 30% 40% Question 3: If the company can raise large amounts of money at an annual cost of 15%, and if the investments are independent of one another, which should it undertake.  Choose from the list.  (Please note you can choose multiple Investments) Question 4: If the company can raise large amounts of money at an annual cost of 15%, and if the investments are mutually exclusive of one another, which should it undertake.  Choose from the list.  (Please note you can choose multiple Investments) Question 5: Considering only these three investments, If the company has a fixed capital budget of $5.5 million, and if the investments are independent of one another, which should it undertake.  Choose from the list.  (Please note you can choose multiple Investments) Question 6:  For questions 3, 4, and 5, provide a two or three sentence explanation for each of your answers. Use the following information from the company Burgundy to answer questions 7 and 8. Equity Shares Outstanding $20 million Stock price per share $40 per share Yield to maturity on debt 7.5% Book value of interest rate on debt $320 million Coupon interest rate on debt 4.8% Market value of debt $290 million Book value of equity $500 million Cost of equity capital 14% Tax rate 35% Question 7: What is Burgundy's weighted average cost of capital?  Enter you answer to the nearest 4 decimal places without the percent sign. Question 8: If Burgundy is evaluating a project that has an initial investment of $30 million (year 0) that results in cash flows of $5 million for the next 10 years should it accept this project?  Why or Why not.  In our answer please also show your calculation for question 7: Question 9 If you get any questions incorrect please show your work here for the potential to receive extra-credit.  Or you can upload an excel with your work on the next question.
Answered 2 days AfterMay 12, 2021

Answer To: Questions 1 and 2 are based on the following scenario: Neptune Biometrics, despite its promising...

Harshit answered on May 14 2021
164 Votes
Question 1
    Year
    Cash flows
    0
     -550,00,000
    1
    
10,00,000
    2
     10,00,000
    3
     10,00,000
    4
     10,00,000
    5
     10,00,000
     
     
    NPV
     -510,07,289.96
NPV = PV of Inflow – PV of Outflow
= PVIF (1000000,8%,5years) – 55,000,000
= 3992710 – 55000000
= - $51,007,289.96
Question 2
NPV is the marketing campaign is not undertaken
    Year
    Cash flows
    0
     -550,00,000
    1
     -150,00,000
    2
     -150,00,000
    3
     -150,00,000
    4
     ...
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