Explore BrainMass

Explore BrainMass

    Capital Budgeting

    BrainMass Solutions Available for Instant Download

    Comparison of Capital Budgeting Techniques

    Comparison of Capital Budgeting Techniques The Dilemma at Day-Pro The Day-Pro Chemical Corporation, established in 1995, has managed to earn a consistently high rate of return on its investments. The secret of its success has been the strategic and timely development) manufacturing, and marketing of innovative chemical pr

    Setting up a Spreadsheet to Build a Net Present Value Model

    Division leaders in JMI's airplane manufacturing plants have asked for your analysis for replacing old manufacturing equipment for standard planes with faster, more costly new equipment next year. This year, though JMI's innovative S2S-900 has experienced moderate initial success, the total aircraft sales have not been as great

    Discussion Board

    JetSet Machinations New York heads the production of the jet lag prevention tablet, SmoothJet, which is effective in 98% of the adult population, and it carries a fully refundable guarantee. Key ingredients of the tablet include kava kava, which is obtained from Hawaii, melatonin, and a mild natural stimulant processed and impor

    Which proposal should be accepted

    $54,200 is required to start a project. Before investing the cash I must see if it is worth it with the following info: * has an expected life of five years and will generate after-tax cash flows to the company as a whole of $20,608 at the end of each year over its five-year life * besides the $20,608 cash flows from oper

    Applied Nanotech NPV

    Applied Nanotech is thinking about introducing a new surface cleaning machine. The marketing department has come up with the estimate that Applied Nanotech can sell 10 units per year at $0.3 million net cash flow per unit for the next five years. The engineering department has come up with the estimate that developing the machin

    Valuing Internal vs. External Opportunities

    Consider the role of the finance department at Strident Marks. The finance department has a couple of new hires, and the CFO has asked that you spend a short amount of time with them, catching them up on some areas that are very important to the company at this time. These also happen to be areas for which Strident Marks does no

    Risk Analysis on Investment Decision

    After completing the Capital Budgeting simulation, prepare a paper analyzing risks associated with your investment decision. Included in the analysis of risks should be a mitigation plan for each risk discussed.

    Various Managerial Accounting Problems

    9.) The sales, income from operations, and invested assets for each division of Jamieson Company are as follows: Sales Income From Operations Invested Assets Division E $4,000,000 $550,000 $2,400,000 Division F 4,800,000 760,000 2,500,000 Division G 7,000,000 860,000 2,800,000 (a) Using the expanded expression, determin

    International Finance and Capital Budgeting Analysis

    1) An MNC is considering establishing a two year project in New Zealand with a $30 million initial investment. The firm's cost of capital is 12%. The required rate of return on this project is 18%. The project is expected to generate cash flows of NZ$12 million in Year 1 and NZ$30 million in Year 2, excluding the salvage valu

    Comprehensive Capital Budgeting Problem

    Clayton Corporation is considering producing a new product. Autodial. Marketing data indicate that the company will be able to sell 35,000 units per year at $35. The product will be produced in a section of an existing factory that is currently not in use. To produce Autodial, Clayton must buy a machine that costs $310,000.

    The Project: Scheduling, Resources, and Budgeting

    Building from the project created in the attached file. Please show me an example of what this project report would look like using the points below. 1. Identify all of the costs involved in the project. Label the costs either direct costs, project overhead costs, or general and administrative overhead costs. 2. Develop

    Calculating the project's MIRR

    A project that I am working on has a cost of $275,000 and is expected to provide after-tax annual cash flows of $73,306 for eight years. The firm's management is uncomfortable with the IRR reinvestment assumption and prefers the modified IRR approach. I calculated a cost of capital for the firm of 12 percent. What is the proj

    Profit Maximization and Stockholder Interest

    Is profit maximization alone an appropriate goal for the firm? Why or why not? Who in a corporation is responsible for protecting and managing stockholders interest? How is profit maximization different from maximizing shareholder wealth?

    Capital Budgeting

    Capital Budgeting Spreadsheet Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash flows are as follows: Expected net cash flows Time Project A Project B 0 ($375) ($575) 1 ($300) $190 2 ($200) $190 3 ($1

    Cost of Equity, Debt, Weight of Debt & Weighted Cost of Capital

    How would you calculate the cost of equity, cost of debt, weight of debt and weight of debt and weighted cost of capital with the following given information. debt-to-equity ratio = .25 beta of common = 1.15 beta of debt = .3 market risk of premium = 10% risk-free rate = 6% corporate tax rate = 35% weight of equity = 80

    Cash Flow

    My company is considering buying new equipment with a cost of $625,000 and a salvage value of $50,000 at the end of its useful life of ten years. The equipment is expected to generate additional annual cash flow for ten years with the following possibilities: Probability Cash Flow .15

    Compute the net present value (NPV) for each warehouse proposal. Include the cash flows from salvage value and the tax benefits of depreciation (assume 5-year straight-line). Incorporate the research data and graphs and charts into your presentation for support to your recommendation.

    *Scenario 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. Unfortuna

    Pay Back Period

    Superior Manufacturing is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 55% of sales. Indirect incremental costs are estimated at $80,000 a year. The project requires a new

    Present value of a security

    You are considering an investment in a 40-year security. The security will pay $25 a year at the end of each of the first three years. The security will then pay $30 a year at the end of each of the next 20 years. The nominal interest rate is assumed to be 8 percent, and the current price (present value) of the security is $360.

    Avoiding Derivative Issuance

    The common stock of ABC has a beta of 1.20. The risk-free rate is 5 percent, and the market risk premium (Km - Krf) is 6 percent. This year's addition to retained earnings is $3,000,000. The company's capital budget is $4,000,000 and its target capital structure is 50 percent debt and 50 percent equity. How large of a ca

    Financial Model Evaluation

    There are two scenarios that I need assistance with. They are attached on one document. I need the solutions and answers to the questions.

    The Master Budget

    Once individual annual budgets have been prepared, they are combined into a large budget called the master budget. Some of the budgets included in the master budget are the sales, purchases, operating expenses, capital, and cash budgets. Ben and Jerry's Homemade, Inc., makes ice cream and frozen yogurt products. Describe

    Capital Budgeting in Excel

    1. If two mutually exclusive projects were being compared, would a high cost of capital favor the longer-term or the shorter-term project? Why? If the cost of capital declined, would that lead firms to invest more in longer-term projects or shorter-term projects? Would a decline (or increase) in the WACC cause changes in the

    ADVERTISEMENT