Question

Which expense reduces the life of an intangible asset? Depreciation Accelerated Depreciation Amortization Capex Question 7...

Which expense reduces the life of an intangible asset?

Depreciation

Accelerated Depreciation

Amortization

Capex

Question 7

  1. Identify the following formula.

    FCFn x (1+g) / (r - g)

    CAPM

    DCF

    PGM

    EEM

    Which of the following is a true statement about capital expenditures?

    They represent actual cash outflows

    They represent theoretical cash outflows

    They represent intangible assets

    They are expenses

    1

    Question 9

    Calculate the market risk premium given the following information.

    Details:

    Risk free rate 3%

    Expected return on market 10%

    Levered Beta   2

    13%

    6%

    7%

    20%

    Question 10

    Calculate the present value of FCF using a year-end discount factor given the following information.

    Details:

    FCF $200.0

    WACC 8%

    $180.0m

    $200.0m

    $185.0mm

    $190.0m

0 0
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Answer #1

Intangible assets:

Assets which are not visible. This assets may be purchased or internally generated. This assets can write off using amortization method.

Answer: Amortization.

_____________________________

7.

Formula

DCF =FCFn x (1+g) / (r - g)

Answer:DCF

_______________

8.

Capital expenditure are the cash out flow for the purchase of assets.

Answer: They represent actual cash outflows

_____________

9.

Market risk premium = market rate - risk free rate

Market risk premium = 10% - 3%

Market risk premium = 7%

_________________

10

Present value = free cash flow/(1+WACC)

Present value = 200/(1+8%)

Present value = 185

__________________

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