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Capital Budgeting

NPV, Equivalent Units for Materials & Relevant Cost Questions

1. (TCO F) Loxham Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Work in process, beginning: Units in beginning work in process inventory

Finance Case: Calculate WACC, NPV, PI, IRR and MIRR

See also enclosed Word document of the case study and excel spreadsheet for the financial exibit. Please help answer all questions. The Investment Detective The essence of capital budgeting and resource allocation is a search for good investments in which to place the firm's capital. The process can be simple when viewed i

Duron Company: Calculate IRR and NPV

Duron Company is considering a project requiring $1 million initial investment. Expected cash inflows will be: ? $25,000 in the first year ? $100,000 in the second year ? $200,000 per year for the next six years. a. Calculate the project's IRR and the NPV assuming an 8% cost of capitol. b. How much would each of t

Company A, Company B: Calculate ROI and residual income for each

The overall sales and operating data for two different companies are given below: Company A Company B Sales $ 6,000,000 $ 8,000,000 Average Operating Assets $ 1,500,000 $ 2,000,000 Net Operating Profit $ 400,000 $ 200,000 Stockholders' Equity $ 1,000,000 $ 1,500,000 Each firm's minimum rat

NPV: Calculate the investment rate of return and its NPV.

The following information is available about an investment opportunity. Investment will occur at time 0 and sales will commence at time 1. Initial cost $10 million Unit sales 100,000 Selling price per unit, this year $50 Variable cost per unit, this year $20 L

Two alternatives 28

Question 28: (2 points) (Ignore income taxes in this problem.) Morrel University has a small shuttle bus that is in poor mechanical condition. The bus can be either overhauled now or replaced with a new shuttle bus. The following data have been gathered concerning these two alternatives: Present Bus New Bus Purchase c

Corporate Finance Multiple Choice Questions

Can you help me get started on these problems? 3) A $120,000.00 investment will pay $34,883.50 year one, $43,604.37 year two, $34,883.50 year three, $17,441.75 year four, and $8,720.87 year five, what is the IRR ? [a] 6.25% [b] 6.50% [c] 6.75% [d] 7.00% [e] 7.25% Hint: The necessary formula is IRR =

Finance Capital Budgeting

Can someone help with the following question? The following is stream of expect cash flows from a project to replace an old sail boat with a new one. The new boat will cost $15,000 and will be good for 5 years. It will be traded-in for another boat at the end of its useful life. The following cash flows are expected: Ye

Net present value with an initial cash flow

What is the net present value of a project that has an initial cash outflow of $12,670 and the following cash inflows? The required return is 11.5%. Year Cash Inflows 1 $4,375 2 $0 3 $8,750 4 $4,100 a) $218.68 b) $370.16 c) $768.20 d) $1,249.65 e) $1,371.02

Some Capital Budgeting

As Scoutmaster of your local scout troop, you have finally decided to give in to the numerous requests from your scouts to purchase a new smoke sifter for the troop. Scouts have told you the new smoke sifter will prove invaluable to the troop, allowing them to recruit new members and raise the troop's annual revenues by $1000 p

Find the present value of the following:

I need to verify the following short financial problems. Please, see an attachment. Thank you. Financial Planning & Controls Review Worksheet 1. Find the present value of the following: A. $1,200 in 5 years @ 5% B. $3,000 in 10 years @ 9% 2. Find the future value of the following: A. $1,500 in 6 years

Payback period, IRR and NPV

Your company uses a 12% annual rate to discount cash flows for NPV. The following table presents the costs of each investment (negative values in time zero) and the expected cash flows for each investment each year. Period A B C 0 -500 -2000 -500 1 200 400 300 2 300 500 200 3 400 800 100 4 500 900 0 5 0 1000 0 1

Case 13 Glaxy Systems, Inc

Please see the attached and information as follows: - This is a revised - short version: - Proposal A: The auto airbags production division submitted a proposal for a new airbag model would cost $ 2,355,600 to develop. The anticipated revenue stream for the next 10 years was $ 400,000 per year. - Proposal B: The aerospace

Should You Take the Investment Opportunity?

Problem: You are considering opening a new plant. The plant will cost $100 million upfront and will take one year to build. After that, it is expected to produce profits of $30 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cos

Internal rate of return 2

2. Year Cash flow 0 -169,000 1 46,200 2 87,300 3 41,000 4 39,000 Required Payback Period 2.5 Required AAR 7.25% Required Return 8.50% Reference: 06_01 Based on the internal r

Evaluating Project Risk

Please provide answers for questions 1 through 7 of the attached document in a word.doc. Please attach any applicable calculations where appropriate. Thanks. 23 Evaluating Project Risk It's Better to Be Safe Than Sorry! "It's amazing how much difference there is in the way proposals are presented at two different fi

Capital Budgeting Decisions

Consider the following data on four mutually exclusive projects under consideration by the Thomas Company: Year Project A Project B Project C Project D 0 -30,000 -60,000 -30,000 -60,000 1 10,000 18,000 15,000 5,000 2 10,000 18,000 12,000 11,000 3 10,000 18,000

Decission Making: IRR Criteria

My company is thinking about buying a new computer for about $925,000. It will be depreciated straight-line to zero over its 5 year life. It'll be worth 90,000 at the end of that time. We should save 360,000 before taxes per year in other costs and we should be able to reduce working capital by 125,000. If the tax rate is 35%, w

Marginal tax rate, zero NPV and tax effects of loss

Question 16 ________ is (are) a factor which complicates the analysis in capital budgeting. a)Income taxes b)Inflation c)Mutually exclusive projects d)All of these answers are correct. Question 17 An asset with a book value of $50,000 is sold at a loss (before taxes are considered) o

Finance: Seattle Corp's NPV for investment, IRR for new goldmine

1. The Seattle Corporation has been presented with an investment opportunity which will yield cash flows of $30,000 per year in Years 1 through 4, $35,000 per year in Years 5 through 9, and $40,000 in Year 10. This investment will cost the firm $150,000 today, and the firm's cost of capital is 10 percent. What is the NPV for

Metrics whether to accept or reject the project

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