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Capital Budgeting

Capital Budgeting: Calculate which Franchise to buy using IRR, MIRR, NPV

You have just graduated from the MBA program of a large university, and one of your favorite courses was "Today's Entrepreneurs." In fact you enjoyed it so much you have decided you want to "be your own boss". While you were in the master's program, your grandfather died and left you $1 million to do with as you please. You are

Capital Planning for a Healthcare Organization

What is meant by capital planning? Why is IRR important to an organization? Why is NPV important to a project? How would you select from multiple projects presented to your organization?

Cash, currencies

1. Which of the following actions are likely to reduce the length of a company's cash conversion cycle? (A) Adopting a just-in-time inventory system which reduces the inventory conversion period. (B) Reducing the average day's sales outstanding (DSO) on its accounts receivable (C) Reducing the amount of time the company takes

Capital Budgeting

1. If an investment project has an internal rate of return equal to the interest rate, the NPV for that project: (A) Is negative (B) Is positive (C) Is Zero (D) May be either positive or negative 2. The Balistan Rug Company is considering investing in a new loom that will cost $12,000. The new loom will create positive en

Finance problems

OTA, Please underline the final answer and display all calculations used to reach solution (Word not Excel). Thank you. 1. Hilton Hotels is planning to open a new hotel in Dubai at an initial investment of $20 million. It expects positive cash flows of $4 million a year at the end of each of the next 20 years. The project'

Multiple choice

1. Which of the following could explain why a business might choose to organize as a corporation rather than as a sole proprietorship or a partnership? A) Corporations generally face fewer regulations. B) Corporations generally face lower taxes. C) Corporations generally find it easier to raise capital. D) Corporations en

How is a stock's beta computed?

1. How is a stock's beta computed? 2. Does a bond's time to maturity ever equal its duration? Please explain. 3. Are the valuation models for common stock with constant, zero growth dividend payments and for preferred stock very similar? Please explain. 4. How do mutually exclusive and independent investment projects di

Use the Marketing area to enter a Price, Promotional Budget, Sales Budget, and Sales Forecast for each product. Accounts Receivable (A/R) and Accounts Payable (A/P) finance decisions are also entered in the Marketing area.

Rules for Marketing. Use the Marketing area to enter a Price, Promotional Budget, Sales Budget, and Sales Forecast for each product. Accounts Receivable (A/R) and Accounts Payable (A/P) finance decisions are also entered in the Marketing area. Although the marketing area provides a Computer Prediction, this is a rough estim

Carter Inc. is evaluating a security. One-year Treasury bills are currently paying 9.1 percent. Calculate the investment's expected return and its standard deviation. Should Carter invest in this security? Determine each project's risk-adjusted net present value.

6.1 (Expected rate of return and risk) Carter Inc. is evaluating a security. One-year Treasury bills are currently paying 9.1 percent. Calculate the investment's expected return and its standard deviation. Should Carter invest in this security? Probability Return 0.15 6% 0.3 9% 0.

Capital Budgeting for Project NPV

Project NPV 1. Suppose a firm is considering the following project, where all of the dollar figures are in thousands of dollars. In year 0, the project requires $37,500 investment in plant and equipment, is depreciated using the straight-line method over seven years, and there is a salvage value of $5,600 in year 7. The proje

Robert Montaya Inc. Case analysis

Book by Eugene. F Brigham. Question are attached. CASE 2 Cash Flow Estimation and Risk Analysis Robert Montoya, Inc. Robert Montoya, Inc., is a leading producer of wine in the United States. The firm was founded in 1960 by Robert Montoya, an Air Force veteran who had spent several years in France both before and af

Case analysis: Reto and Torgler purchase of equipment: IRR, rate of return

Reto S.A. In December 2004, R. E. Torgler was trying to decide whether to add a new line of injection molded plastic products to those already manufactured and distributed by Reto S.A. In order to do so, the firm would have to buy new injection molding equipment; none of the existing equipment could be adapted to perform t

Business Financial calculations

This is a business financials problem I need major help on. Problem 1 - EPS Analysis ABC Company has 11,000 shares of equity outstanding with a market price of $100. The company is not encumbered with any debt. Management is looking at two alternative recapitalization plans. The first alternative calls for issuing $

Three Capital Budgeting Techniques

In finance, it is important not only to understand how to use various calculations, but also to know the limitations of these calculations. This is the purpose of the ongoing discussion. Tasks: You have learned about the three capital budgeting techniques financial managers use to make decisions about capital expenditures.

Time Value of Money and Valuing Bonds

Suppose you purchase a ten-year bond with a 6% annual coupons. You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yeild to maturity was 5% when you purchased and sold the bond. a. What cash flows will you pay and receive from your investment in the bond per $100 face

Free Cash Flow (PFCFs), NPV and IRR

CT Computers is considering whether or not to begin offering customers the option to have their old personal computers recycled when they purchase a recycling system. The recycling system would require that CT invest $600,000 to purchase grinders and magnets to use in recycling process. The company estimates that for each system

Calculate free cash flow (PFCF), NPV and IRR

Can you help me get started with this assignment? South Tel Communication is considering a purchase of a new software management system. The system is called B-Image, and it is expected to drastically reduce the amount of time that company technicians spend installing new software. South Tel's technicians currently spend 6000

Topic = The pros and cons of static and flexible budgets - instructions below

Introduction: This section will discuss your topic and the purpose of the paper. You will clearly state the problem, issue of concern/interest, or area(s) the paper is seeking to address. Body of Paper: You will use the internet/online library resources to research material to support your paper. You will find a lot of

Answer to student's question about: Capital Budgeting

A firm with a 14 percent WACC is evaluating two projects for this year's capital budget. After-tax cash flows, including depreciation, are as follows: 0 1 2 3 4 5 Project A -6,000 2,000 2,000 2,000 2,000 2,000 Project B -18,000 5,600 5,6

Basic Net Present Value Analysis is achieved.

Renfree Mines, Inc., owns the mining rights to a large tract of land in a mountainous area. The tract contains a mineral deposit that the company believes might be commercially attractive to mine and sell. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with op

Net present value with no residual value is determined.

Florence is contemplating the purchase of a soda machine, which will be used to sell soft drinks to customers for $.75 each. The following estimates are available: Initial outlay $3,500 Annual cash inflow $1,000 Cost of capital 10% Estimated life

Capital budgeting

I need help with the following issues: how to calculate the net present value and the dollar value per year attach to the intangible benefits? "I am not sure we should lay out $500,000 for that automated welding machine", said JA president of SEC. "That's a lot of money, and it would cost us $80,000 for software and installat

Finance: NPV, IRR, Payback

You have two projects. You must calculate the NPV, IRR, and payback for both. These projects may be made up and very simplified but must show numerical examples. Explain the value of NPR, IRR and payback. Of the two projects you've created, which project would you invest in if the projects were mutually exclusive versus independ

To Hot to Handle: Case Study - Capital Budgeting

See the case file attached. Exhibit 1 Some Relevant Information Salon Hours: Sunday, Monday Closed Tues-Thurs 9am - 7pm Fri 9am - 5pm Sat 9am - 2pm Advertising Costs $300 per month (Yellow Pages Ad) $200 per month (other advertisements) Patsy's After-tax cost of funds: 11% per year Depreciation method: Straight line

Silicon Arts: Risk Analysis on Investment Decision Simulation

See attached file for simulation. After completing the Capital Budgeting simulation, prepare an APA paper analyzing the risks associated with your investment decision. Included in the analysis of risk should be a mitigation plan for each risk discussed. Focus on concepts learned and applied in the exercise and present the