CE 701 · Chapter 6
Describe project finance. Capital structure of a firm consists of 500 ordinary share @ Rs 100/share and 300 preference share @ Rs 100/share at 15% interest per year. Firm has a loan of 30,000 @ 12% per year firm's earning before interest and tax is 40,000. Determine earning per share and book value. Tax rate = 40%
What are the sources of project finance? A project has an initial investment of Rs. 3,00,000 which gives annual return of Rs. 50,000 for 8 years. The salvage value after 8 years will be Rs. 10,000. Make an investment decision.
Define the term project financing. Explain features of capital structure planning. A project has total capital of Rs 5,00,000 which consists of 2000 shares @ Rs 100, 1,50,000 preference share 18% interest and remaining loan @ 14% interest. Earning before interest and tax in a year is Rs 1,00,000. Calculate EPS and book value of share if tax rate is 25%.