Explore BrainMass

Capital Budgeting

Net Advantage to Leasing; Reverse Splt

A.The financial manager of Time Press Inc. is considering installing a printing machine for $400,000. The machine will be depreciated using straight line method with zero residual value over a period of 4 years. Alternatively, the firm can lease the printing machine with an annual lease payment of $132,000 over 4 years. The c

Timmon Corporation: evaluate 3 long-term capital investment proposals

See attached file. Timmons Corporation is considering three long-term capital investment proposals. Relevant data on each project are as follows. Project Brown Red Yellow Capital investment $190,000 $220,000 $250,000 Annual net income: Year 1 25,000 20,000 26,000 2 16,000 20,0

Determine Taunton's optimal capital budget

Can you help me get started on this?? THANKS! ------------- Taunton's target capital structure is as fallows. Debt----------------------------30% Preferred stock---------------5 Common equity--------------65 100% Other information: -Taunton's marginal tax rate (state and federal) is 40% -Floatation cost ave

Finance Type in General Electric Co for Quotes

Go to Yahoo! Finance and type in GE (General Electric Co.) for Get Quotes. Under News and Info, check on Headlines. Go to headlines for Thursday, November 26, 2009 and read the article "GE Health care installs Russia's first GE high definition CT scanner at Moscow's Center of Medical Rehabilitation." Explain the following conce

Financial Management Principles

On Your Mark is considering purchasing new manufacturing equipment that costs $1,300,000 and is expected to improve cash flows by $500,000 in year 1, $350,000 in year 2, $475,000 in year 3, $450,000 in year 4, and $300,000 in year 5. Key financial metrics for this capital budgeting project have been calculated and provided by

NPV for Hoosier Inc

NPV Hoosier Inc is planning a project in the United Kingdom. It would lease space for one year in a shopping mall to sell expensive clothes manufactured in the United States. The project would end in one year, when all earnings would be remitted to Hoosier Inc. Assume that no additional corporate taxes are incurred beyond

Present Value

What is the present value of: a) $9000 in 7 years at 8% b) $20000 in 5 years at 10% c) $10000 in 25 years at 6% d) $1000 in 50 years at 16%

Capital budgeting for new product: Compute standard and real options NPV

Your company wants to invest in a new product. The marketing department provided you with the following data: After-tax cash flows for new product Year 1 2 3 4 5 6 Low Demand 100 100 100 100 100 100 High Demand 300 500 600 700 700 600 All the cash flows will be received at the end of the year (Ignore taxes and depreci

Present Value Analysis - James Hardy

Hi, ** Please help with the attached problems. ** Thank you so much. James Hardy recently rejected a $14,000,000, five-year contract with the Vancouver Seals. The contract offer called for an immediate signing bonus of $4,000,000 and annual payments of $2,000,000. To sweeten the deal, the president of player

Expect annual after-tax case flow from equipment, IRR, NPV

Jared Corp. invests in a piece of equipment that cost $150,000, has a useful life of five years with no salvage value and will be depreciated using straight-line depreciation. The equipment will generate annual revenues of $60,000 and the company will incur annual cash Expenses of $24,000 in operating the equipment. Jared has a

The Present Value of Two Solutions for a Coffee Company

A coffee company is evaluating the with-in plant distribution system for its new roasting, grinding, and packing plant. The two alternatives are 1) a conveyor system with a high initial cost, but low annual operating costs and 2) several forklift trucks, which costs less, but have considerably higher operating costs. The decisio

Watson Leisure Time Sporting Goods: Calculate NPV, is new equipment feasible?

Watson Leisure Time Sporting Goods has improved operations over time and the company needs to make a decision related to an equipment decision. The company plans to purchase a new piece of equipment (to be used over a six year period) for $320,000. Assume the EBDT and depreciation (based upon the use of the 5-year MACRS

Net Present Value - most likely, pessimistic, optimistic rosy

Below is a earning's forecast for a "Most Likely" Scenario. Determine the Net Present Value for each of the following three scenarios. Most Likely Conditions as show below Pessimistic Sales are only 175,000 units annually, and Cost of Goods sold raises from 70% of Sales revenue to 75% for all years. Price drops t

LiveForever Biotechnology Corp: Net Present Value calculations

LiveForever Biotechnology Corporation (LFBC) has a new potential drug developed by their research group for which they are planning the marketing. The plan has three steps: 1) development (gaining approvals and designing processes and packaging), 2) marketing as a proprietary drug (no direct competitors) and 3) marketing as a g

NPV (Wolverine Corporation)

Hello, My problem is based on NPV. I am having trouble because I keep coming up with different answers. Will you please help me and show all work including explanations as to why you came to that conclusion? Thank you so much for your time! ***I am really confused and any help would be greatly appreciated!*** --------

Business: Capital Budgeting

The owner of a new startup company, GreatIdea LLC, needs a working capital analysis for the coming four quarters to assist with her cash flow concerns. Unlevered Net Income is expected to be zero for the first two quarters and $100,000 in quarter 3 and $300,000 in quarter 4. Accounts payable will be constant at $50,000 per qu

Net Present Value for Periodical Sales

National Book and Periodical Sales (NBPS) is considering a proposal to offer a proprietary electronic book reader. They have hired a company to develop and produce a product in 2010 at a cost of $1.5 million which will be depreciated straight line over 5 years. The reader would sell for $200 each which is the cost of producin

Logic of the business process of using Structured English

In a relatively small company that sells thin, electronic keypads and switches, the rules for selling products are such that sales representatives are assigned to unique regions of the country. Sales come either from cold calling, referrals, or current customers with new orders. A sizable portion of their business comes from ref

Present Structured English: Decision Table and Logic

An organization is in the process of upgrading microcomputer hardware and software for all employees. Hardware will be allocated to each employee in one of three packages. The first hardware package includes a standard microcomputer with a color monitor of moderated resolution and moderate storage capabilities. The second packag

Budgeting and Profit Planning

Attached Wynn Corporation is approximating the following sales for the first six months of the next year: January.......................$212,000.00 February.....................$385,000.00 March..........................$275,000.00 April.............................$500,000.00 May..............................$325,000.

Component Costs of Capital and the WACC

Star Products Company is a growing manufacturer of automobile accessories whose stock is actively traded on the over-the-counter (OTC) market. During 2009, the Dallas- based company experienced sharp increases in both sales and earnings. Because of this recent growth, Melissa Jen, the company's treasurer, wants to make sure that

Project Evaluation for Machine Purchase & Project Performance

1. Sanjay's Incorporated is analyzing two machines to determine which one it should purchase. The company requires a 14% rate of return and uses straight-line depreciation to a zero book value. Machine A has a cost of $290,000, annual operating costs of $8,000, and a 3-year life. Machine B costs $180,000, has annual operating co

Evaluating Projects using NPV, IRR & PI

Please see attached file. 1) The X Corp has identified the following two mutually exclusive projects. X Corp has a cost of capital of 10%. What is the NPV, IRR and PI of each project and which project should they accept and why? TIME PROJECT A PROJECT B 0 -10,000 -10,000 1 12,000 100 2 100 100 3 100 100 4 100 16,000

Principles of managerial finance - 50 multiple choice questions

Please complete the attached 50 multiple choice practice problems 1 Finance can be defined as A) The system of debits and credits. B) The science of the production, distribution, and consumption of wealth. C) The art and science of managing money. D) The art of merchandising products and services. Answer

Multiple Choice/ T-F

I need help with the answers. True/False . Please indicate if the statement is True or False in the space provided below. 1. The break-even model expresses the volume of output as a unit quantity. 2. According to the DuPont Analysis, an increase in net profit margin will decrease return on assets.

Investment decisions: Innovation Co, Elm Dale Enterprises, Markov Manufacturing

Please show all work. Excel can also be used. 1. Innovation Company is thinking about marketing a new software product. Upfront costs to market and develop the product are $5 million. The product is expected to generate profits of $1 million per year for ten years. The company will have to provide support expected to cost $1