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    Capital Budgeting

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    Find the NPV, MIRR, and which year the present value cash flows become positive.

    In reviewing a capital project the company is looking to undertake. The project is a new line of goods the company will produce. The CEO has stated that the decision to move forward will be driven by the net present value of the project (it must be positive), and the modified internal rate of return must be at least 13%. Here a

    New Project Analysis: Capital Budgeting

    You have been asked to evaluate the proposed acquisition of a new spectrometer for the firm's R&D department. The equipment's basic price is $70,000, and it would cost another $15,000 to modify it for special use by the firm. The spectrometer, which falls into the MACRS 3-year class, would be sold after 3 years for $30,000. U

    Return on Investment for the Product Department

    1. Gibson Company has tow production departments, Mixing and Finishing, served by a maintenance department. Bugeted fixed costs for the maintenance department were $30,000, and the variable cost per labor hour was $4.00. Other relevant data is as follows: Mixing Finish

    Working Capital & Operating/Cash Conversion

    The Latigo Company has the following financial information: a. The current assets to sales ratio for the industry is 0.20. State whether Latigo make more or less use of working capital than the industry. b. Compute the working capital turnover for Latigo and for the industry. c. Compute the operating cycle and the

    Corporate Finance

    Compose a memo to the CEO explaining the investment decision tools that are used by corporations. Use various investment decision tools.

    Target Profit

    John Jones is president of Clean Machines, a new car washing service that makes house calls. John has decided that his goal for the coming year is to earn a profit of $40,000. Clean Machines reported the following sales and cost information for the year just ended: Sales revenue $60,000

    Capital budgeting

    Which capital budgeting technique is consistent with maximizing shareholder wealth and why?

    Question 3

    Biogenetics, Inc plans to retain and reinvest all of their earnings for the next 30 years. Beginning in year 31, the firm will begin to pay a $12.00 per share dividend. The dividend will not subsequently change. Given a required return of 15%, what should the stock sell for today?

    NPV

    1.Project K has a cost of $52,125, its expected net cash inflows are $12,000 per year for 8 years, and its cost of capital is 12 percent. (Hint: Begin by constructing a time line) a. what is the projects payback period (to the closest years)? b. what is the projects discounted payback period? c. what is the projects npv?

    Payback Method, IRR and NPV

    The three methods of ranking investments are the payback method, the internal rate of return, and net present value. Please explain the differences of each.

    Graphic Systems

    Graphic Systems purchased a computerized measuring device two years ago for $80,000.00. It falls into the five-year category for MACRS depreciation. The equipment can currently be sold for $28,400.00. A new piece of equipment will cost $210,000.00. It falls into the five-year category for MACRS depreciation.

    Desert Coffee Roasters and Pro Forma Financial Statements

    Please see attachments for instructions and details. Thank you. Based on the data provided in the Cumulative Case Study: Desert Coffee Roasters, Inc.: a. Select the relevant financial data. b. Using Excel, prepare 3 years of pro forma financial statements (balance sheet, income statement, and statement of cash flows). Use

    Business finance

    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

    Planning and budgeting

    Andre has asked you to evaluate his business, Andre's Hair Stylling. Andre has five barbers working for him. (Andre is not one of them.) Each barber is paid $9.90 per hour and works a 40-hour week and a 50-week year, regardless of the number of haircuts. Rent and other fixed expenses are $1,750 per month. Hair shampoo used on al

    Text Problems on Unifying Concepts

    Unifying Concepts: Net Present Value and Internal Rate of Return Methods Julie Kowalis, an investment analyst, 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 space in it.

    Profit maximisation and wealth maximization

    Explain why profit maximisation fails to be consistent with wealth maximisation. Include reasons why profit maximsation and/or wealth maximisation or may not be appropriatte corporate goals in your explanation.

    Financial Calculation Questions:

    QUESTIONS: * A corporation is planning an expansion project that it desires to finance with newly issued preferred stock. The firm has an outstanding issue of preferred stock that pays a dividend of $4.25 per share, which is trading for $65 a share. The investment bankers have advised Seven Eleven that flatation costs will be

    Important information about Project's IRR

    The capital budgeting director of Sparrow Corporation is evaluating a project that costs $200,000, is expected to last for 10 years and produce after-tax cash flows, including depreciation, of $44,503 per year. If the firm's cost of capital is 14 percent and its tax rate is 40 percent, what is the project's IRR? Choices of a

    Cash flow

    Green Grocers is deciding among two mutually exclusive projects. The two projects have the following cash flows: . Year Project A Cash Flow Project B Cash Flow 0 -$50,000 -$30,000 1 10,000 6,000 2 15,000

    Net Present Value of the Factory

    The factory purchased cost $400,000. The estimated inflow for year one is $120,000, year two $180,000 and year 3 $300,000. There is discount rated at 12 percent. What is the formula for time value of this situation?

    Net present value and also the internal rate of return

    I need to find out the net present value of the cash flows and also the internal rate of return on the cash flows. Here are some more info: The purchase price of the company is $5.74 million dollars and it as shown as an "addition to PP&E" in year 0 - The $2.7 million dollar inflow in year 1 shown under "disposals of

    Capital Budgeting: How to Calculate the NPV of a Project

    Global Technology is considering investing in a new computer system. The system would be used for all of the firm's business applications and is expected to yield the following (incremental) benefits (with all other yearly flows remaining constant): * Additional sales revenue of $50,000 per year, given the fact that the sy

    If the appropriate discount rate is 10%, what is the NPV of the contract?

    Today a firm signed a contract to sell a capital asset for $90,000. The firm will receive the payment five years from today. The asset costs $60,000 to produce, payable immediately. a. If the appropriate discount rate is 10%, what is the NPV of the contract? b. At what discount rate will the firm break even on the sale of th

    Finance

    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

    Finance

    Unifying Concepts: Payback and Internal Rate of Return The management of Kitchen Shop is thinking of buying a new drill press to aid in adapting parts for different machines. The press is expected to save Kitchen Shop $8,000 per year in costs. However, Kitchen Shop has an old punch machine that isn't worth anything on the marke

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