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April 27, 2015

Homework Help: Finance:capital budget

Posted by gloria on Thursday, July 28, 2011 at 3:44pm.

I am suppose to write a 1400 word paper based on the purchase of three new trucks costing $30,000 each and $10,000 of equipment for each one, with the life expansion of the trucks to be 5 years by calculating the firms' required return using the capital asset pricing model and the following assumptions of Beta = 3.0, Risk-Free rate = 2.5% and Return on the market portfolio = 9.5% with a 20% cash down payment and financed with payments of $650 per month over 5 years, with the expected generate additional annual cash flows for year 1 = 9,200, year 2= 12,800, year 3 = 15,000, year 4= 18,000 and year 5 = 20,000

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