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Capital Budgeting

Business Finance Questions (3)

Please help with the following 3 business finance questions. Thanks Textbook Fundamentals of Financial Management (Custom) Author: Brigham. Publisher: Thomson South-Western Publishers, 2006, ISBN #0-324-34705-0 1. Project Selection - Midwest Water Works estimates that its WACC is 10.5 percent. The Company is considering t

Internal Rate of return and NPV

Question- 1 ABC Steel Co. is considering to invest in a heavy-duty machine. Details for the machine are as follows: Initial Investment: $100,000 Cash Inflows for 5 years: Year 1 $40,000 Year 2 $30,000 Year 3 $20,000 Year 4 $15,000 Year 5 $10,000 Salvage value of the machine after 5 years is $9,000. AB

Quality Management for IT Projects

Details: Project selection directly affects organizational success. As BPP prepares to offer its new portfolio management services, it sees a need to address the project selection process. Provide a memorandum detailing the flow of information involved in a generic capital budgeting process. This will be used as a basis for d

Capital Budgeting Decision for Target Corp.

A Capital Budgeting Decision of Your Company Assume that TARGET CORP. is contemplating an investment in an expansion project. A team of experts from different units of the company came up with the following projections regarding the required investment and schedule, costs and revenues emanating from the investment over the nex

Public Administration: Capital Projects

What are capital projects in public administration planning? What is the process in your state for planning and funding public capital projects? Emphasize all possible legislative funding options for these projects.

Critical thinking - Problems

What are the characteristics of a problem? How might a problem present itself? How should a problem be investigated and identified? What are five steps to be considered while framing a problem?

Cash Flows

1) For a capital budgeting proposal, assume this year's cash sales are forcast to be $220, cash expenses $130, and depreciation $80. Assume the firm is in the 30% tax bracket. Is it possible to determine the projects after tax cash flow. 2) A restaurant is considering an expansion. Construction will cost $90,000 and will be d

NPV, Discounted Payback Period

1) A project has an initial cost of $52,125, expected net cash inflows of $12,000 per year for 8 years, and a cost of capital of 12%. What is the project's NPV? (Hint: begin by constructing a time line.) 2) What is the project's discounted payback period?

After Tax Cash Flow

I'm trying to understand how to calculate the After Tax Cash Flow value in the scenario below for each mutually exclusive option. To calculate the Present value or IRR (Internal rate of return) you need to have an after tax cash flow with the Purchase cost in year zero and the Annual cash in each year of the trucks life. The dep

Budgets - Welon Industrial Gas Corporation

Welon Industrial Gas Corporation supplies acetylene and other compressed gases to indusrty. Data regarding the store's operations follow: -Sales are budgeted at $360,000 for November, $380,000 for December and $350,000 for January. -Collections are excepted to be 75% in the month of sale, 20% in the month following the sal

Net present value profile, Loan repayment

21. Software Systems is considering an investment of $20,000, which produces the following inflows: Year                                Cash Flow 1                                     $11,000 2           

Accounting Study Guide Help

I have four multiple choice questions that I am stumped on when it comes to my Study Guide. The book that was used in the class was the 18th Edition Fundamental Accounting Principles by Wild Larson and Chiappetta. This four multiple choice questions have been giving me the run around. Thanks in advance. See the attached.

Value received

Value of $20,000 is to be received in a year at 4% compounded annually, and im suppose to round it off. My answer was 800. I multiplied 20,000x4%.

Utilizing the Time Value of Money

Urgent > Please Help. Write a 350-word summary, in which you answer the following questions: a. Besides net present value (NPV) and internal rate of return (IRR), what other criteria do companies use to evaluate investments? b. What are the disadvantages of NPV as an investment criterion? c. How will the change in co

NPV, IRR, MIRR, Payback

An expansion will require company to purchase today (t=0) 5 mill. of equipment. the equipment will be depreciated over 4 yrs. Year1 33% Year2 45% Year3 15% Year4 7% The expansion will require the company to increase its net operating working capital by 500,000 today (t=0) this net operating working capital will be re

Business finance practice questions

8. Using the constant growth model, a firm's expected (D1) dividend yield is 3% of the stock price, and it's growth rate is 7%. If the tax rate is .35%, what is the firm's cost of equity? a) 10% b) 6.65% c) 8.95 % d) More information is required. 13. Assume a corporation has earnings before depreciation and taxes

NPV and IRR

The IRR and NPV rules always lead to identical decisions if: a. The project's cash flows are conventional. b. The projects are mutually exclusive. c. The projects are independent. d. Both (a) and (b). e. Both (a) and (c). One investment opportunity should be rejected if its NPV is ________ and its IRR is ________. a. P

Net present value, payback, IRR, and accounting rate of return

Consider the following two mutually exclusive projects, each of which requires an initial investment of $100,000 and has no salvage value. The organization, which has a cost of capital of 15%, must choose one or the other (see attached) Cash Inflows (End of year) Year Project A Project B 1 $30,000

NPV and IRR multiple choice

There are two independent investment projects for the Galactic Empire. Project A costs the Empire $300,000 to set up, and it will provide annual cash inflows of $70,000 for 7 years. Project B costs the Empire $1,000,000 to set up, and it will provide annual cash inflows of $255,000 for 6 years. The Empire's cost of capital (i

Capital Budgeting Decision

Year Project A Project B 0 -$250,000 -$400,000 1 $100,000 $50,000 2 $80,000 $70,000 3 $60,000 $80,000 4 $40,000 $120,000 5 $20,000 $200,000 The above are two mutually exclusive investment projects for Rebel Alliance. The Alliance requires getting their invested amount fully paid back within 5 years. The Alli

NPV and IRR

Ferengi, Inc. is subject to an applicable corporate tax rate of 35 percent, and the weighted average cost of capital (WACC) of 12.5 percent. 1) Ferengi is currently contemplating two capital investment plans. Plan A: the upgrade of an information system with an installed cost of $2,400,000. The upgrade system will be deprec

Budgeting

Please help by providing a 125-word response to each of the following questions: How does a capital budget originate and what is it suppose to accomplish? How are corporate responsibilities divided in preparation of the budget? What are the advantages and disadvantages of the budget originating from top executive o

Present value of a $250,000 inheritance

You expect to receive an inheritance of $250,000 in 5 years. You could invest that money today at 8% compounded semi-annually. What is the present value of the inheritance?

Net Profit and Float

Question 20 Beguiling Telecom Corp.'s customers send payments by check, which spend an average of 2 days in the mail. Processing of the checks requires 2 days, and BTC's bank delays availability of the checks for 2 days. Customers send their checks an average of 5 days after they receive their statements. Beguiling Telecom has

CFO AND NPV CONCEPT

I need assistance with the attached two part assignment. I have also attached an example Spreadsheet. References: http://www.12manage.com/methods_npv.html Do you think finance departments are the best place to train future CEOs? Include a discussion of both the pros and cons of hiring a CFO to be CEO. Try to cite at