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Cash

Dollar Return on the Weekly Investments

4. A company's weekly cash position is as follows: · Week 1 $24,000 · Week 2 $34,000 · Week 3 $10,000 · Week 4 $15,000 The annual interest rate for investments is 12% what dollar return can the company earn on these weekly investments.

Free Cash Flows (FCF) Valuations

As a part of the Final project Assignment, on Saturday, October 25, 2008, of this week you will do the Valuation using Free Cash Flows (FCF). The following free cash flows (in $ Million) are projected for the next five years. The free cash flows are expected to grow at a stable rate of 7% for every year after year 5. The opportu

Mater Pasta: forecast operating cash flows

Mater Pasta, Inc., has projected sales volume of $1,432 for the second year of a proposed expansion project. Costs normally run 70% of sales or about $1,002 in this case. The depreciation expense will be $80, and the tax rate is 34%. a) What is the net cash flow (operating cash flow)?

What is the cash flow in year 1?

The Wet corp. has an investment project that will reduce expenses by $15,000 per year for 3 years. The projects cost is $20,000. If the asset is part of the 3-year MACRS category (33% first year depreciation) and the company's tax rate is 34%, What is the cash flow in year 1?

Schedule of Cash Collection

Victoria's Apparel has forecast credit sales for the 4th Quarter as: September (actual) $50,000 4th Quarter October (forecast) 40,000 November (forecast) 35,000 December (forecast) 60,000 Experience has shown that 20% of credit sales are collected in the month of the sale, 70%

Forecast of growth rate in free cash flow

At the end of 2006, you forecast that a firm's free cash flow for 2007 will be $430 million. The firm has 5,000 million shares outstanding, trading at $4.30 each and no net debt. What is the forecast of the growth rate in free cash flows after 2007 that is implicit in the market price? Use a required return of 10%.

Best case operating cash flow

You are analyzing a project and have developed the following estimates. The depreciation is $72,000 a year and the tax rate is 35 percent. What is the best case operating cash flow? Base Case Lower Bound Upper Bound Unit Sales 2700 2400 2900 Price Per Unit $210 $19

Choosing a Project Based on ROR, Payback, NPV, etc.

A company is considering two additional mutually exclusive projects. The cash flows associated with these projects are as follows: YEAR PROJECT A PROJECT B 0 -$100,000 -$100,000 1 32,000 0 2 32,000 0 3 32,000 0 4 32,000 0 5 32,000 $200,000 The required rate of return on these projects is 11 percent. 1. What is each

Target Cash Level

The variance of the daily net cash flows for the Tseng Asian Import Co is $1.44 million. The opportunity cost to the firm of holding cash is 8% per year. The fixed cost of buying and selling securities is $600 per transaction. What should the target cash level and upper limit be, if the tolerable lower limit has been establis

Ernie's Electrical's Operating Cash Flow

Ernie's Electrical is evaluating a project which will increase sales by $50,000 and costs by $30,000. The project will cost $150,000 and be depreciated straight-line to a zero book value over the 10 year life of the project. The applicable tax rate is 34 percent. What is the operating cash flow for this project?

A Schedule of Cash Payments

The Elliot Corporation has forecast the following sales for the first seven months of the year: January $12,000 February $16,000 March $18,000 April $24,000 May $12,000 June $20,000 July $22,000 Monthly material purchases are set equal to

Market earnings and cashflows

Consider the following statement: "I don't know why anyone would ever try to value earnings. Obviously, the market knows that earnings can be manipulated and only values cash flows." Discuss in 1 paragraph. Consider the statement that "the DCF valuation method has increased managers' focus on short-term rather than long-term

Cost of Not Taking the Cash Discount

Acme offers its customers a cash discount of 4% if payment is made within 15 days, rather than its current net 45 policy. Assuming a 365-day year, what is the annual rate Acme is charging its customers who do not take the discount?

Impact of cash discount for TNT, Inc

TNT, Inc. currently has a credit policy of "net 45," but is considering changing the policy to "2/10 net 45." The firm does not expect the new policy to have any effect on its annual credit sales, which are $10,000,000. The new credit policy is estimated to decrease the average collection period from its present level of 62 days

Calculating Investment Returns & Cash Dividends

1: Calculating Investment Returns What is the most valid approach to Calculating Investment Returns? Should the same approach be used for every investment type? why or why not? 2: Cash Dividends Do cash dividends have an affect on the return of stock, and will a stock with a stable dividend history have less market volatil

Cost of waiving Discount on Credit Terms

A company is offered trade credit terms of 3/15, net 45 days. The company does not take the discount, and instead pays after 67 days. What is the nominal annual Cost of not taking the discount? (Assume a 365-day year.)

Present Value of Cash Flow Stream

An investment promises the following cash flow stream: $1000 at Time 0; $2000 at the end of Year 1 (or at T=1); $3000 at the end of Year 2; and $5000 at the end of Year 3. At a discount rate of 5%, what is the present value of the cash flow stream?

Calculating Cash Collections and Sales

April May June Sales Budget $150,000 $173,000 $ 194,000 credit sales are collected as follows: 65 % in the month of sale 20 % in the month after sale 15 % in the second month after the sale accts. rec. balance at th

Uneven Cash Flow Forecast

$2,566.70 in a project that is promising to return 12 percent per year. The cash flows are expected to be as follows: End of Cash Year Flow 1 $325 2 400 3 550 4 ? 5 750 6 800 What is the cash flow at the end of the 4th year?

Current Free Cash Flow

Question: A firm has the following information for the previous year: Net income = $400; Net operating profit after taxes (NOPAT) = $500; Total assets = $2,000; and Total operating capital = $1700. The information for the current year is: Net income = $800; Net operating profit after taxes (NOPAT) = $700; Total assets = $2,30

Value of 2/10 n30

Now if you were a finance manager and several of your suppliers were offering you 2/10 n30, but when it came time to pay the invoice you did not have enough cash in the bank to cover, what would you do?

Operating Cash Flow (OCF) for Company XYZ

OCF at year 1 (t=1) for a proposed project for company XYZ has the following information: Sales = $10,000,000 Operating Costs (excludes depreciation) = $7,000,000 Depreciation = $2,000,000 Interest Expense = $2,000,000 XYZ tax rate = 40% XYZ WACC (Weighted Avg. Cost Capital) = 10% 1) What is the project's operating ca

Cash balance/ float concepts

A company has the following cash balance: Company's ledger balance = $600,000 Bank's ledger balance = $625,000 Available balance = $550,000 a. Calculate the payment float and availability float b. Why does the company gain from the payment float? c. Suppose the company adopts a policy of

Interest calculation and Cash-Flow

Question 1: Would you rather have a savings account that pays 5% interest compounded semiannually or one that pays 5% interest compounded daily? Explain. Now, suppose on July 1st you deposit $10,000 in an account that pays a nominal, or quoted, interest rate of 11.33463 percent, with interest added (compounded) daily. Th