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    Cash

    The Company A has provided the following information

    The Company A has provided the following information: Forecasted sales for 1st quarter $200,000 Forecasted sales for 2nd quarter 250,000 Cash sales = 10% of total sales Collection schedule: In quarter sold 75% In next quarter 25% What are forecasted cash collections for the second quarter for Company A?

    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?

    Constant growth rate DDM

    5. The Amazing.com Corporation currently pays no cash dividends, and it is not expected to for the next 5 years. Its sales have been growing at 25% per year. a. Can you apply the constant growth rate DDM to estimate its intrinsic value? Explain. b. It is expected to pay its first cash dividend $1 per share 5 years from now

    Rate of Return/Net Cash Flow

    Risk free rate of interest is 7.3% Market risk premium 14.1% What is the required rate of return on a stock beta 0.3? Expected return for overall stock market? Company with EBIT of 2 million depreciation expense of 625,000. It is 100% equity financed and is on 32% tax bracket. What's the net cash flow?

    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

    Business Cash and Marketable Securities

    How can cash discounts improve cash collections? What are the ramifications if a firm has too much cash on hand? How can the use of marketable securities be appropriate investments in the management of cash?

    Cash Flow - The PC Shopping Network

    The PC Shopping Network may upgrade its coomputer systems. It last upgraded 2 years ago, when it spent $115 million on equipment with an assumed life of 5 years and an assumed salvage value of $15 million for tax purposes. The firm uses straight-line depreciation. The old equipment can be sold today for $80 million. A new moder

    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

    Cash Balance/Calculations

    Question 1 - Mr. Eli Lilly is very excited because sales for his nursery and Plant Company are expected to double from $600,000 to $1,200,000 next year. Eli notes that net assets (assets - liabilities) will remain at 50 percent of sales. His firm will enjoy an 8 percent return on total sales. He will start the year with $120,000

    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