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It is really not enough time to do Q1! I just do half of part(ii), want to use bsop to calculate the option price but even cannot find the volatility! then i stop and quickly move to next question. All info are not directly given,need to do many calculation, how three hours enough to do all of these? Really terrible!
I think i get it already! I have missed the sentence which state that “assume that it is 1 nov 2013”,
So from 1nov to 1 feb, is three months~Besides,for calculation on proposal 3, the 5% growth is an assumption or got mention in the question?
The perpetuity factors used
0.11-0.05, the 0.05 is that 5% growth??
Thanks a lot~Sorry, I have another question :
In discounting value, when to use nominal rate and when to use real rate?
Sir,i have try it,but the discounted tax saving should be 17.63/1.072=16.45, i can’t get 15.87.
One more question, why the $50 mil that incurred over previous year no need to take into account where question state that the costs will be charge to project in the first year operatio?
Q5 a
Anothe question,why the written down value is until end of year 6 that is 31.1 instead of 51.84 at year 5?
And how to get tax saving 17.63 and its discounted rate?