If a company is currently worth $10 million dollars and receives a $4 million investment, roughly what percent of the company’s total equity does the new investor now own?

a.33%

b. 40%

c. 25%

d.29%

18. You are a purchasing manager for Bre-X, a mining company based in Calgary. The company is currently recruiting for a new business analyst to join your team. As a manager, your involvement in the process will begin once the HR department has hired the business analyst. a) True b) False

You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,420,000; rents are estimated at $181,760 during the first year and are expected to grow at 2.5 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A fully amortizing 70 percent loan can be obtained at 6 percent interest for 30 years (total annual payments will be monthly payments × 12). The property is expected to appreciate in value at 2 percent per year and is expected to be owned for five years and then sold.

Required:

a. What is the first-year debt coverage ratio?

b. What is the terminal capitalization rate?

c. What is the investor’s expected before-tax internal rate of return on equity invested (BTIRR)?

d. What is the NPV using a 14 percent discount rate?

e. What is the profitability index using a 14 percent discount rate?

Which of the following is not needed to compute the present value of an​ investment?

A) The interest rate.

B) The rate of inflation.

C) The amount of the receipt.

D) The length of time between the investment and future receipt.