Course: Corporate Finance
December 2021 Examination

 

1. MCARTECH Pvt. Ltd. is considering two mutually exclusive capital investments. The
project’s expected net cash flows are as follows:

Expected Cash Flows
Year	Project A	Project B
0	-500	-875
1	100	150
2	110	200
3	120	250
4	175	375
5	240	530
6	300	680

a. If you were told that each project’s cost of capital was 12%, which project should be
selected using the NPV criteria?

b. What is the profitability index for each project if the cost of capital is 12%?
c. What is the regular payback period for these two projects?
(10 Marks)

2. Assume that you plan to take a housing loan with a tenor of 20 year. The loan has to be
repaid in equal monthly installments. Considering that the loan amount is Rs. 50 lakhs
and the interest rate on loan is 9% p.a., what would be the equated monthly installment
(EMI)? (10 Marks)

 

3. LT India Ltd has the following capital structure, which it considers optimal:
Debt 35%
Equity shares 65%
Total 100%
Applicable tax rate for the company is 25%. Risk free rate of return is 6%, average equity
market investment has expected rate of return of 12%. The company’s beta is 1.10. Debt
will bear an interest rate of 9% p.a.

a. component cost of debt and equity shares assuming that the company does not issue
any additional equity shares. (5 Marks)

b. Weighted Average Cost of Capital (WACC). (5 Marks)

Complete Solved Assignment is available here

NMIMS Complete Solved Assignments

Available for the session December 2021

The deadline is November 27th, 2021

Easy online ordering of cheap assignments help

With our cheap and reliable service, we are here to help

Contact No – 8791514139 (WhatsApp)

OR

Mail us- [email protected]

Our website – www.assignmentsupport.in