. explain the relationship in your answers to parts ​(b​), ​(c​), and ​(d​). ​(select all the correct​ choices.) a. results from ​(b​), ​(c​), and ​(d​) are the same because all methods value​ xia's assets today. b. whether xia pays out cash now or invests it at the​ risk-free rate, investors get the same value today. c. the point is that a firm can increase its value by more efficiently doing what investors can do by themselves​ (and is the essence of the separation​ principle). d. the point is that a firm cannot increase its value by doing what investors can do by themselves​ (and is the essence of the separation​ principle).

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Risk-free Interest Rate = 9.50%

Project A:

NPV = -$16,000 + $27,000/1.095

NPV = $8,657.53

Project B:

NPV = -$8,000 + $23,000/1.095

NPV = $13,004.57

Project C:

NPV = -$61,000 + $79,000/1.095

NPV = $11,146.12

All projects have positive NPV, and Xia has enough cash, so Xia should take all of them.

Answer b.

Total Value of Assets = Cash + NPV of Projects

Total Value of Assets = $100,000 + $8,657.53 + $13,004.57 + $11,146.12

Total Value of Assets = $132,808.22

Answer c.

Cash in hand to day = $100,000

Cash invested in projects = $16,000 + $8,000 + $61,000

Cash invested in projects = $85,000

Cash invested for 1 year = $100,000 - $85,000

Cash invested for 1 year = $15,000

Cash flow in 1 year = $15,000*1.095 + $27,000 + $23,000 + $79,000

Cash flow in 1 year = $145,425

Cash flow in 1 year = $145,425

Value of Xia today = $145,425/1.095

Value of Xia today = $132,808.22

Answer d.

Unused Cash = $100,000 - $85,000

Unused Cash = $15,000

Cash flow today = $15,000

Cash flow in 1 year = $27,000 + $23,000 + $79,000

Cash flow in 1 year = $129,000

Value of Xia today = $15,000 + $129,000/1.095

Value of Xia today = $132,808.22

Answer e.

Results from (b), (c), and (d) are the same because all methods value Xia's assets today.

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