Problem A: Try evaluating the following projects with all of the basic capital budgeting tools, in other words, which project would you pick as the best: Projected Cash Flow Years 0 1 2 3 4 5 Project A (500) 45 55 65 175 185 Project B (250
Determine the payback period, discounted payback period, NPV, profitability index, IRR from sample #1 attached Use the following data to for 1,2,3 4,5 below: Undiscounted Year Free cash flows 0 (350,000) 1 10,000 2 40,000 3 80,000 4 100,000 5 120,000 6 80,000 7 100,000 Required rate of return = 8% 1. The payback p
Create an example of a budget and an example of a forecast using imaginary numbers from your start-up business...
Assume you are starting a new business. Write a half page explanation of the difference between budgeting and forecasting and the purpose of each. Create an example of a budget and an example of a forecast using imaginary numbers from your start-up business. Your budget and your forecast should contain income(sales of product
What are earnings if the owners put up the $100? Firm's weighted-average cost of capital at various combination of debt and equity. What is the firm's optimal capital structure? If the net present value method is used, which investment(s) should the firm make? Construct a pro forma balance sheet that indicates the firm's optimal capital structure.
Firms' weight average cost of capital and other questions: 1. A firm needs $100 to start and expects: Sales $200 Expenses $185 Tax rate 33% of earnings a. What are earnings if the owners put up the $100? b. If the firm borrows $40 of the initial at 10%, what are the profits rece
Need to discuss my findings for the following problems. Discussion should be 1 paragraph long for both questions. (See Attachments) --- 1. Edelman Engineering is considering including two pieces of equipment, ________________________________________ Edelman Engineering is considering including two pieces of equipment, a t
Practice problem- no grade Revise Excel Spreadsheet (attached) to a time-phased budget for implementing software. Identify the primary cost drivers. Do not need to worry about depreciation of the software. Need to focus on understanding what the costs are, and when those costs will be incurred during the implementation pr
A company is considering replacing a five-year old machine that originally cost $50,000, presently has a book value of $25,000 and could be sold for $60,000. This machine is currently being depreciated using the simplified straight line method down to a terminal value of zero over the next five years, generating depreciation of
Suppose you are the chairperson of the Fed's Board of Governors at a time when the economy is depressed, and you are called to testify before a congressional committee. Write an explanation for an interrogatory senator outlining how your expansionary acts would operate and what would be the effects on the economy?
5 questions on NPV, IRR, Cost of Capital, Financial planning (See attached file for full problem description) --- 1. Banner Forklift, Inc. has identified the following two mutually exclusive projects: (a) Apply NPV and IRR to decide which of these two projects you would accept. The required return on the project is 1
1. Cash Equation. Stabbing Westward Company has a book net worth of $21,000. Long-term debt is $5,000. Net working capital, other than cash, is $8,500. Fixed assets are $8,000. How much cash does the company have? If current liabilities are $4,000, what are current assets? 2. Calculating Cash Collections. The following i
Katie, wants to know if her investments during the past four years have earned at least a 12% return. Four years ago she had the following investments. a)She purchased a small building for $50,000 and rented the space in it. She received rental income of $8,000 for each of the four years and then sold the building this year f
What ROI would you expect on a new strategic program or service?
In evaluating the implementation of a new strategic initiative in an organization, what would be the critical data sources you would utilize to predict financial performance?
Budgeting behavioral implications Crunch numbers is a manufacturer of calculators In the budget setting process, budget A was put together by lower and middle management. Budget B was put together by senior management. A B Unit sales 20,000 30,000 dollar sales $600,000 $900,000 less variable expenses:
Q1 Two companies, A and B, have the following balance sheet accounts: A B Current assets $ 150 $ 800 Fixed assets 300 2200 Current liabilities 75 600 Long-term debt 75 1000 Equity 300 1400 a. Compute values for all of the ratios that measure working capital for firms A and B. b. Compare Firm A to B with regards to its
Colorado Texas New Line Replace Acquire Pollute Cumulative NPV 0 $(1,319,000) $(3,534,000) $(1,582,000) $(4,845,000) $(24,050,000) $(1,650,000) 1 $(233,318) $(583,296) $465,263 $661,105 $4,374,354 $- 2 $525,358 $1,260,859 $766,303 $831,781 $3,146,041 $- 3 $480,408 $1,104,938 $725
1. Discuss the limitations of financial leverage. 2. The Hartnett Corporation manufactures baseball bats with Sammy Sosa's autograph stamped on. Each bat sells for $13 and has a variable cost of $8. There is $20,000 in fixed costs involved in the production process. a. Compute the break-even point in units. b.
The Woodruff Corporation purchased a piece of equipment three years ago for $230,000.It has an asset depreciation range(ADR) midpoint of eight years.The old equipment can be sold for $90,000. A new piece of equipment can be purchased for $320,000.It also has an ADR of 8 years. Assume the old and new equipment would provide
I saw almost the same Question in the solution library but it only had brief answers, no formulas, explanations, etc. I'd love some nice walking through with this one, if you will :) Graphic Systems purchased a computerized measuring device two years ago for $80,000.It falls into the five year category for MACRS depreciation.
In a fast growing company, does an increase in the company's sales necessarily imply an increase on the expense side as well? Explain please. How can organizations increase the accuracy of the budgeting process? How are long-term capital expenditures budgeted in a quarterly budgeting process? Are cash budgets impli
What are some differences between IRR and PI? What would Lisa Cross say about IRR? Why would an organization choose to lease an asset instead of buying it? Refer to the text and article by D.O. Burgess.
See the attached Excel file. Betsy Cotner went to work for a title company after graduation from college. The department she worked in provided disbursement advice to banks with regard to oil/gas-related loans. When a bank granted a construction loan, the money was paid out according to progress made. Someone had to monitor
It is August 8, 2005. You are a Financial Advisor. On July 20, 2005, you were contacted by management of Growing To Fast, Inc. (Company). They have asked you to help them turn the Company around. The Company has been in existence for 30 years manufacturing widgets that are used in the aerospace industry. The Company had be
I need assitance in identifying the formulas needed to resolve my problem. (See attached file for full problem description) --- Jane Burns and Carl Foster started a computer store several years ago. The first couple of years were excellent, but then they began to fell the pressure of increasing competition; volume and
Please review my computations. I need help with 15 d and 15 e, please. (See attached file for full problem description)
PROBLEM #1A Given the data below, identify the depreciation method used for each depreciation schedule as of the following (please note that it is not necessary to show all calculations, but enough to show how you know which method is represented): First cost $80,000 Book depreciation l
Which of the following component costs is expressed on an after-tax basis in the calculation of a firm's cost of capital? a. cost of debt b. cost of preferred stock c. cost of common equity d. b and c e. all of the above The component cost of a firm's preferred stock consists of a. the cur
QUESTION - CLEARAWAY UPHOLSTERY LIMITED a) Calculate the initial investment associated with each alternative. b) Calculate the incremental operating net cash inflows associated with each alternative. c) Calculate the terminal cash flow at the end of five years associated with each alternative. d) Make a recommend
You have been asked by the president of your company to evaluate the proposed acquisition of a new hydropropolaser for the R&D department. The price for this equipment is $70,000, and it would cost another $14,000 to modify it for special use by your firm. The hydropropolaser, which has a MACRS 3-year recovery period (wts. 3
It is January 2005, and you observe the following price quote: BK Corp. 5 1/2s28Dec Close 92 3/4 1.Suppose interest rates were to fall by 1.5% over the next year. What would be the rate of return from buying the bond today, holding it for one year, and selling it at its new market price? 2. You are setting