Explore BrainMass

# Capital Budgeting

### Congratulations! Your work on understanding and managing the costs and profitability of Claire's Antiques has resulted in record-breaking sales volume and profits.

Congratulations! Your work on understanding and managing the costs and profitability of Claire's Antiques has resulted in record-breaking sales volume and profits. As a result, senior management is considering two new warehouse locations in order to serve its customers in the North and West more efficiently. Unfortunately, the c

### Capital Budget

I have read my assigned chapter thoroughly however; I am lost on the attached problems. 1. Calculate in the net present value and profitability index of a project with a net investment of \$20,000 and expected net cash flows of \$3,000 a year for 10 years if the project's required return is 12 percent. Is the project acce

### 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

### You're at a peer networking event, and talk turns to how technology has impacted the global business environment. Research the reasons why organizations like sewworld invest in information technology. Identify 3-5 online articles from the Library or from the internet that discuss how IT inventment allows organizations to remain competitive in changing market conditions. Explain why you believe it would be important for SewWorld's leadership to read the articles you selected and how it applies to their current situation.

Scenario: A twenty year old company, SewWorld, comprised of six locations in three states, sells sewing machines, sewing related software, and accessories. Each store sells between 3-5 different brands of sewing machines. Currently the stores run independently with separate inventory databases, budgets, and expenses. Becaus

### Net Present Value

(Ignore income taxes in this problem.) Chee Company has gathered the following data on a proposed investment project: Investment required in equipment \$250,000 Annual cash inflows \$60,000 Salvage value \$0 Life of the investment 6 years Required rate of return 6% The net present value on this investment is closest

### Net Present Value - Canyon Power Company

Attached is the problem (Case 12-1).

### You are the manager of the apparel division of On Your Mark, a manufacturer of athletic equipment and apparel, which has recently gone through the initial public offering (IPO) process and has become

Scenario: You are the manager of the apparel division of On Your Mark, a manufacturer of athletic equipment and apparel, which has recently gone through the initial public offering (IPO) process and has become a public company. On Your Mark has annual sales revenue of approximately \$50 million and makes seven unique and distinc

### 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

### BMI is considering a project that has a cost of \$33,578.17 and it's expected net cash inflows are \$12,000 per year for 4 years. What is the project's IRR?

BMI is considering a project that has a cost of \$33,578.17 and it's expected net cash inflows are \$12,000 per year for 4 years. What is the project's IRR? 10% 13% 16% 18% -- A firm with a cost of capital of 13 percent is evaluating three capital projects. The internal rates of return are as f

### You have been asked to evaluate the country you selected as a potential market for your product(s)/service(s) and present your findings to other managers of the organization in a memo.

I have the following task, and I need some help getting started: Write a 3-5 pages by selecting a company and country that interests you. You have been asked to evaluate the country you selected as a potential market for your product(s)/service(s) and present your findings to other managers of the organization in a memo. In y

### 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

### Compute the Incremental Net Income, Cash Flow and NPV

Please help doing 3 things: a. - computing the incremental net income of the investment for each year b - Compute the incremental cash flow of the investment for each year, and c - calculate the NPV of the project if the discount rate is 12% The information has been attached. year 0 year 1 year 2 year 3

### 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

### Calculate NPV and IRR for two mutually exclusive projects

Company K is considering two mutually exclusive projects. The cash flows of the projects are as follows: Year Project A Project B 0 -\$2,000 -\$2,000 1 \$500 2 \$500 3

### How to create a collaborative work environment with present employment?

How can you assist in creating a "collaborative" work environment within your present employer? Would it be different than creating a "collaborative" environment in the online format?

### Explain about corporations using various investment decision tools

Explain the various tools that can be used in investment decision making by corporations.

### 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

### A Speedy-Mart Store in Northcenter Mall has the following budgeted sales

See attach files. See attach excel file for spreadsheet example. A Speedy-Mart Store in Northcenter Mall has the following budgeted sales, which are uniform throughout the month: May \$450,000 June 375,000 July 330,000 August 420,000 Cost of goods sold averages 70% of sales, and merchandise is purchased essentia

### NPV and IRR

A project has the following cash flows: Year Cash Flow 0 \$65,200 1 -31,200 2 -49,100 Required: (a)What is the IRR for this project? (Do not include the percent sign (%). Round your answer to 2 decimal places, e.g. 32.16.) IRR ___?____ percent (b) (i)What is the NPV o

### What is meant by capital requirements for the business? Why do all businesses need be concerned about capital? Explain the different types of capital? Do they interact? Why or why not.

What is meant by capital requirements for the business? Why do all businesses need be concerned about capital? Explain the different types of capital? Do they interact? Why or why not.

### Two mutually exclusive projects: using present value, which is the most desirable?

Use the information below to answer the following question(s). Consider the following two mutually exclusive projects, each of which requires an initial investment of \$30,000 and both provide cash inflows of \$60,000 as shown below. This organization has a 15% cost of capital. Year Project A Project B 0 (\$30,000) (\$30,00

### Multiple Choice questions in working capital and financing: Ratio analysis, costs of issuing securities, sequence of events for a security issue, financial plan, percent-of-sales method of financial forecasting, annual interest rate, current asset management, hedging, break-even model, Time Value of Money, debt financing, NPV, cash discount period, lock box arrangement, economic ordering quantity, leases, SEC, financial plan, forecasting, asset management, hedging

1. Which of the following is not a reason why financial analysts use ratio analysis? a. Ratios help to pinpoint a firm's strengths. b. Ratios restate accounting data in relative terms. c. Ratios are ideal for smoothing out the differences that may exist when comparing firms that use different accounting practices. d. Some o

### Current ratio & capital budgeting decisions

Explain current ratio, discuss it implications, and describe a good current ratio if it's too high or too low explain reasoning; and describe how businesses make capital budgeting decisions.

### Capital Budgeting

1. Calculate the net present value and profitability index of a project with a net investment of \$20,000 and expected net cash flows of \$3,000 a year for 10 years if the project's required return is 12 percent. Is the project acceptable? 2. A firm wishes to bid on a contract that is expected to yield the following aftertax

### Accounting

Topic: Flexible Budgets and Standard Costs Topic: Special Decisions and Capital Budgeting 1. ABBA Manufacturing makes staplers. The budgeted selling price is \$10 per stapler, the variable rate is \$5 per lock and budgeted fixed costs are \$12,000. What is the budgered operating income for 5,000 staplers? a. \$15,000 b. \$

### IRR

What is the IRR for a project if its initial after tax cost is \$5,000,000 and it is expected to provide after-tax operating cash inflows of \$1,800,000 in year 1, \$1,900,000 in year 2, \$1,700,000 in year 3 and \$1,300,000 in year 4?

### Finance: firm goal, ratios, financial plan, forecast, interest rate, ROR, NPV, break even

1. Which of the following statements best represents what finance is about? a. How political, social, and economic forces affect corporations b. Maximizing profits c. Creation and maintenance of economic wealth d. Reducing 2. The goal of the firm should be: a. Maximization of profits. b. Maximization of sh

### Profitability Index versus NPV: Compare two projects

Profitability Index versus NPV. Consider these two projects: Project C0 C1 C2 C3 A -\$36 +\$20 +\$20 +\$20 B - 50 + 25 + 25 + 25 a. Which project has the highest NPV if the discount rare is 10%?