Incremental CashFlows. A corporation donates a valuable painting from its private collection
to an art museum. Which of the following are incremental cashflows associated with the donation?
a. The price the firm paid for the painting.
b. The current market value of the painting.
c. The deduction from income that it declare
From the lessee viewpoint, the riskiness of the cashflows, with the possible exception of the residual value, is about the same as the riskiness of the lessee's
a. equity cashflows
b. capital budgeting project cashflows
c. debt cashflows
d. pension fund cashflows
If the appropriate discount rate for the following cashflows is 12.25 percent per year, what is the present value of the cashflows?
Year 1 Cash flow is $1500.
Year 2 cash flow is $3200.
Year 3 cash flow is $7200.
Year 4 cash flow is $9600.
Paradise, Inc., has identified an investment project with the following cashflows. If the discount rate is 8%, what is the the future value of these cashflows in year 4. What is the future value at a discount rate of 11%?At 24%?
Year Cash Flow
1 $ 700
A company forecasts the following free cashflows (shown in millions of dollars). If the weighted average cost of capital is 13 percent and the free cashflows are expected to continue growing at the same rate after Year 3, what is the Year 0 value of operations, to the nearest million? Year: 1 2 3 Free cash flow: -$20 $40 $42
The statement of cashflows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of cash are subtracted). Please answer which of the following is true if Baldwin's accounts payable goes down: (see attachment for da
Projects A and B have the same cost, and both have conventional cashflows. The total cash inflows for A (undiscounted) are $400. The total for B is $360. The IRR for A is 20%; the IRR for B is 18%.
a) What can you deduce about the NPVs for Projects A and B?
b) What do you know about the crossover rate?
Question: Richard Corporation's new project calls for an investment of $10,000. It has an estimated life of 10 years. The IRR has been calculated to be 15%. If cashflows are evenly distributed and the tax rate is 40%, what is the annual before tax cash flow each year? (Assume depreciation is a negligible amount.)