Financial Management Assignment: Capital Budgeting and WACC Analysis

This financial management assignment solution addresses several key concepts in finance. Question 1 focuses on capital budgeting, specifically the Net Present Value (NPV) analysis of a new equipment purchase for National Brewing Inc., evaluating cash flows over a 10-year period, including depreciation, revenue, operating costs, and salvage value, ultimately determining whether the investment is financially viable. Question 2 delves into risk and return, calculating the variance and standard deviation of Euroflop's stock returns over five years. Question 3 explores the time value of money, calculating monthly payments and preparing an amortization schedule for a car loan, demonstrating how interest and principal payments change over time. Question 4 involves computing the present value of lease payments over 10 years, considering a 14% discount rate. Finally, Question 5 focuses on the cost of capital, determining the weighted average cost of capital (WACC) for a company with debt, preferred stock, and equity, and using this WACC to evaluate the financial viability of potential investment projects.