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Furlion Co manufactures heavy agricultural equipme...

Furlion Co manufactures heavy agricultural equipment and machinery which can be used in difficult farming conditions. Furlion Co’s chief executive has been investigating a significant opportunity in the country of Naswa, where Furlion Co has not previously sold any products. The government of Naswa has been undertaking a major land reclamation programme and Furlion Co’s equipment is particularly suitable for use on the reclaimed land. Because of the costs and other problems involved in transporting its products, Furlion Co’s chief executive proposes that Furlion Co should establish a plant for manufacturing machinery in Naswa. He knows that the Naswan government is keen to encourage the development of sustainable businesses within the country.

Initial calculations suggest that the proposed investment in Naswa would have a negative net present value of $1·01 million. However, Furlion Co’s chief executive believes that there may be opportunities for greater cash flows in future if the Naswan government expands its land reclamation programme. The government at present is struggling to fund expansion of the programme out of its own resources and is looking for other funding. If the Naswan government obtains this funding, the chief executive has forecast that the increased demand for Furlion Co’s products would justify $15 million additional expenditure at the site of the factory in three years’ time. The expected net present value for this expansion is currently estimated to be $0.

It can be assumed that all costs and revenues include inflation. The relevant cost of capital is 12% and the risk free rate is 4%. The chief executive has estimated the likely volatility of cash flows at a standard deviation of 30%.

One of Furlion Co’s non-executive directors has read about possible changes in interest rates and wonders how these might affect the investment appraisal.

Required:

(a) Assess, showing all relevant calculations, whether Furlion Co should proceed with the significant opportunity. Discuss the assumptions made and other factors which will affect the decision of whether to establish a plant in Naswa. The Black Scholes pricing model may be used, where appropriate. (16 marks)

(b) Explain what is meant by an option’s rho and discuss the impact of changes in interest rates on the appraisal of the investment. (5 marks)

(c) Discuss the possibility of the Naswan government obtaining funding for further land reclamation from the World Bank, referring specifically to the International Development Association. (4 marks)

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更多“Furlion Co manufactures heavy agricultural equipme...”相关的问题

第1题

??Motber Nature Shows Her Strength??

?? ????????Tornadoes(龙卷风) and heavy thunderstorms moved across the Great Lakes and into TrumbullCounty on Saturday evening: The storms were dramatic and dangerous.

?? GeorgeSnyder was driving the fire truck down Route 88 when he first noticed that afunnel(漏斗状的)cloud was behind him. "I stopped the truck and watched thefunnel cloud. It was about 100 feet off the ground and I sawit go up and down for a while. It was moving toward Bradley Road and then suddenly itdisappeared. Snyder said.??

?? Snyderonly saw one of the funnel clouds that passed through northeastern Ohio on Saturday.In Trumbull County,a tornado turned trees onto their sides. Some trees feel onto houses and cars.Other trees fell into telephone andelectrical wires as they went down.

?? AmandaSymcheck was having a party when the storm began. "I knew something waswrong, "she said. "I saw the sky go green and pink (??粉红色). Then it sounded like a train rushing toward the house. I started crying and told everyone togo to the basement for protection. "????

?? Thetornado caused a lot of damage to cars and houses in the area. It will take along time and much money to repaireverything. There was also serious water damage from the thunderstorms.The heavy rains and high wind caused thepower to go out in many homes.????

?? Thestorms caused serious flooding in areas near the river. More than four inchesof rain fell in parts of Trumbull County. The river was sohight that the water ran into streets and houses. Many streets had to be closedto Cars and trucks because of the high water. This made it difficult for firetrucks. police cars,and other rescue vehicles to help people who were introuble.??

?? Manypeople who live near the river had to leave their homes for their own safety.Some people re- ported five feet of water in their homes. Local and stateofficials opened emergency shelters for the people who were evacuated(撤走). The Red Crossserved meals to them.??

?? "This was a really intense storm. "said Snyder. People wereafraid. Mother Nature call be fierce. We were lucky this time. No one waskilled. "

The weather was nice in Trumbull County on Saturdayevening.????????????

A.Right

B.Wrong

C.Not mentioned

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第2题

Over 60 million persons in the United States own a credit card. For these millions of Americans a credit card is "coined freedom". It has had effect of increasing consumption possibilities for households by allowing them to purchase thousands of dollars of merchandise. ranging from autos. clothing, to electrical appliances. The widespread use of creditcard nowadays staggers the imagination to the point where one wonders whether the total amount of consumption spending each year would be the same if this "plastic money" were not around, Credit cards have also been of significant importance to the national economy.Businessmen have been encournged to expand plant and equipment and hire additionat personnel to meet the heavy demand for their products, The tendency of employment and income would rise significantly. Unfortunately the ease with which buyers can increase their purchase with credit cards have caused them to overlook the additional costs.Purchase on credit cards are postponed payments. Buy-now pay later encourages buyers to use credit cards ,extencively.Since the buyer is in effect borrowing money for a special purposer he must expect to pay an interest charge. Interest is the price of using money over a long period of time. A close analysis of the use for credit cards for heavy purchases will show that the buyer has added to the cost of making these purchases. It must also be kept in mind that unpaid monthly balances means added interest charges. Furthermore. the use of credit cards will add to the most purpose of the product since the shopkeeper does not receive the money at the time of the purchase, Shopkeepers might add on the cost of handing credit cards to the bill. One of the arguments against the use of credit cards has been that those who do pay cash at the time if purchase finance the use of a credit card by another person.This is so, the argument runs, because the price of a product will include the cost of another persons use of a credit card.

Which of the following is NOT true about credit cards?

A.It can encourage great sums of consumption

B.Shopkeepers, among others object to the use of credis cards because they add on the cost of the merchandise

C.Credit card holders actually pay for their shopping goods afer the purchase has been completed

D.The national economy enjoys extensive growth because of the use of credit cards

What is the main topic of the passage?A.Advantages and disadvantages of credit cards

B.Economic growth hacked up by the use of credit cards

C.Arguments against the use of ecredit cards

D.Credit cards make life easier

What are the arguments against the use of credit cards?A.It may lead to the overgrowth of the national economy.

B.The delay in the payment of shopping goods may bring damage to shopkeeprers’profits.

C.Some people may intentionally purchase goods that they cannot possbly aford

D.Those who pay by cash at the purehase will have to pay for the cost added to the product as the interest charge of credit cards

The writers purpose in this passage is to____.A.argue against credit card

B.deseribe a phenomenon

C.introduce us the disadvantage and advantage of credit card

D.propose an original viewpoint

请帮忙给出每个问题的正确答案和分析,谢谢!

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第3题

听力原文: The Eskimos need a great many different things to survive. To make a snow house they need a special knife, shaped something like a cutlass, to cut the snow blocks. For the bed platform. they need layers of heavy skins and furs and poles and brush to lay underneath. They need a deerskin blanket to cover the whole family at night. Then they need a set of short poles to make a frame. over the lamp for hanging the pot and for drying clothes. Flint and pyrite are needed to strike a spark to light the fire, and a special moss is needed to make wicks for the lamp. Then people need bone picks to take the hot meat out of the stew pot and cups to drink the hot soup. For melting snow or fresh water ice for drinking, they keep skin buckets on the platform. near a lamp. For a window in the house, they need a clear sheet of fresh water ice.

(23)

A.They need layers of skins.

B.They need a great many poles.

C.They need a special knife.

D.They need many deerskin blankets.

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第4题

Why doesn't the girl like the brown wallet?

A.There isn't a place to put pictures.

B.It's too big and heavy.

C.She doesn't like the color.

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第5题

It was previously believed that dinosaurs were cold-blooded creatures, like reptiles. However, a recent discovery has lad researchers to believe they may have been warm- blooded. The fossilized remains of a 66 million-year-old dinosaur's heart were discovered and examined by x-ray. The basis for the analysis that they were warm- blooded is the number of chambers in the heart as well as the existence of a single aorta (主动脉).

Most reptiles have three chambers in their hearts, although some do have four. But these that have four chambers, such as the crocodile, have two arteries (动脉) to mix the oxygen-heavy blood with oxygen-lean blood. Reptiles are cold-blooded, meaning that they are dependent on the environment for body heat. Yet the fossilized heart had four chambers in the heart as well as a single aorta. The single aorta means that the oxygen-rich blood was completely separated from the oxygen-poor blood and sent through the aorta to all parts of the body.

Mammals, on the other hand, me warm-blooded, meaning that they generate their own body heat end are thus mere tolerant of temperature extremes. Birds and mammals, because they are warm blooded, move more swiftly and have greater physical endurance than reptiles.

Scientists believe that the evidence now points to the idea that all dinosaurs were actually warm- blooded. Ironically, the particular dinosaur in which the discovery was made was a Tescelosaurus, which translates to "marvelous lizard." A lizard, of course, is a reptile.

According to the author, what theory was previously held and now is being questioned?

A.That dinosaurs were warm-blooded.

B.That dinosaurs had four-chambered hearts.

C.That dinosaurs were swifter and stronger than reptiles.

D.That dinosaurs were cold-blooded.

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第6题

Over a million people visit Hawaii (夏威夷) each year because of its beautiful weather and wonderful scenery. The Hawaii islands have very mild temperatures. For instance, August, the hottest month, average 78.4°F, while February, the coldest month, averages 71.9°F. In addition, the rainfall in Hawaii is not very heavy because mountains on the northern side of each island stop incoming storms; for example, Honolulu averages only 23 inches of rain per year. The beautiful weather helps tourists to enjoy Hawaii's wonderful natural scenery, from mountain waterfalls to fields of flowers and fruits. And Hawaii's beautiful beaches are everywhere--.from the lovely Kona coast beaches on the large island of Hawaii to Waikiki Beach on Oahu. Warm sunshine and beautiful beaches--it is not surprising that so many people visit Hawaii each year. Are you going to join us? Don't miss the chance!

Hawaii

Famous for its (46) and (47) .

Average temperature: range from 71.9°F to (48) .

Annual rainfall in Honolulu: (49) .

Attractions for tourists: the beautiful weather and (50) .

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第7题

My father's reaction to the bank building at 43rd Street and Fifth Avenue in New York City was immediate and definite. “You won't catch me putting my money in there!” he declared, “Not in that glass box!”

Of course, my father is a gentleman of the old school, a member of the generation to whom a good deal of modern architecture is upsetting, but I am convinced that his negative response was not so much to the architecture as to a violation of his concept of the nature of money.

In his generation money was thought of as a real commodity (实物) that could be carried, or stolen. Consequently, to attract the custom of a sensible man, a bank had to have heavy walls, barred windows, and bronze doors, to affirm the fact, however untrue, that money would be safe inside. If a building's design made it appear impenetrable, the institution was necessarily reliable, and the meaning of the heavy wall as an architecture symbol dwelt in the prevailing attitude toward money.

But the attitude toward money has, of course, changed. Excepting pocket money, cash of any kind is now rarely used; money as a tangible commodity has largely been replaced by credit. A deficit (赤字) economy, accompanied by huge expansion, has led us to think of money as product of the creative imagination. The banker no longer offers us the safety: he offers us a service in which the most valuable element is the creativity for the invention of large numbers. It is in no way surprising, in view of this change in attitude, that we are witnessing the disappearance of the heavy-walled bank.

Just as the older bank emphasized its strength, this bank by its architecture boasts of imaginative powers. From this point of view, it is hard to say where architecture ends and human assertion (说法) begins.

The main idea of this passage is that______.

A.money is not as valuable as it was in the past

B.changes have taken place in both the appearance and the concept of banks

C.the architectural style. of the older bank is superior to that of the modern bank

D.prejudice makes the older generation think that the modern bank is unreliable

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