Question
In: Finance
Please solve by hand, not using excel. No discount rate provided. Suppose Blue Thumb Tools is...
Please solve by hand, not using excel. No discount rate provided.
Suppose Blue Thumb Tools is considering the introduction of a new, heavier hammer to be used for driving spikes. The new hammer will cost $490,000. The cost will be depreciated straight-line to zero over the project’s five-year life, at the end of which the new hammer can be scrapped for $40,000. The new hammer will save the firm $146,000 per year in pretax operating costs, and it required an initial investment in net working capital of $35,000. The tax rate of the firm is 30%.
What are the cash flows of firm’s new project (using a time line)?
What is the net present value of this project (list your setups)?
What is the IRR of this project (list your setups)?
Solutions
jeff jeffy answered 11 months agoRelated Solutions
Suppose Blue Thumb Tools is considering the introduction of a new, heavier hammer to be used...
Suppose Blue Thumb Tools is considering the introduction of a
new, heavier hammer to be used for driving spikes. The new hammer
will cost $490,000. The cost will be depreciated straight-line to
zero over the project’s five-year life, at the end of which the new
hammer can be scrapped for $40,000. The new hammer will save the
firm $146,000 per year in pretax operating
costs, and it required an initial investment in net
working capital of $35,000. The tax rate...
Suppose Blue Thumb Tools is considering the introduction of a new, heavier hammer to be used...
Suppose Blue Thumb Tools is considering the introduction of a
new, heavier hammer to be used for driving spikes. The new hammer
will cost $490,000. The cost will be depreciated straight-line to
zero over the project’s five-year life, at the end of which the new
hammer can be scrapped for $40,000. The new hammer will save the
firm $146,000 per year in pretax operating costs, and it required
an initial investment in net working capital of $35,000. The tax
rate...
9. Suppose Blue Thumb Tools is considering the introduction of a new, heavier hammer to be...
9. Suppose Blue Thumb Tools is considering the introduction of a
new, heavier hammer to be used for driving spikes. The new hammer
will cost $490,000. The cost will be depreciated straight-line to
zero over the project’s five-year life, at the end of which the new
hammer can be scrapped for $40,000. The new hammer will save the
firm $146,000 per year in pretax operating costs, and it required
an initial investment in net working capital of $35,000. The tax...
please solve by hand
please solve by hand
The management of Blue Thumb Tools believes the firm’s current capital structure is optimal and intends...
The management of Blue Thumb Tools believes the firm’s current
capital structure is optimal and intends to maintain it in the
future. Blue Thumb’s bonds are selling for $950 each. Its common
stock is selling for $37 a share and its preferred stock is selling
for $88 per share. There are 50,000 bonds outstanding, 10,000,000
shares of stock and 3,000,000 shares of preferred stock
outstanding, respectively.
What are the current weights of Blue Thumb’s capital
structure?
Blue Thumb’s stock has...
Please solve without the use of excel by discounting the cash flows "by-hand". Find the FV...
Please solve without the use of excel by discounting the cash
flows "by-hand".
Find the FV of $10,000 33 years in the future if the
opportunity cost rate is 8% (use Excel formulas and basic PV/FV
techniques).
Find the PV of $1,000,000 to be delivered in 16 years if the
opportunity cost rate is 7% (use Excel formulas and basic PV/FV
techniques).
Would you prefer the following (you can use just formulas for
this problem):
An ordinary annuity where you...
*****SOLVE USING EXCEL AND PLEASE SHOW THE EXCEL COMMANDS THAT ARE USED******** A company is considering...
*****SOLVE USING EXCEL AND PLEASE SHOW THE EXCEL COMMANDS THAT
ARE USED********
A company is considering the purchase of a new machine that will
enable it to increase its expected sales. The machine will have a
price of $100,000. In addition, the machine must be
installed and tested. The costs of installation and
testing will amount to $10,000. The machine will be
depreciated using 3-years MACRS. (Use MACRS table from class excel
exercise by copying the table and pasting it)
The
equipment will...
Depreciation Problem: (8pts) ---- Please complete using Excel or by hand. A machine was purchased for...
Depreciation Problem: (8pts) ---- Please complete using Excel or
by hand.
A machine was purchased for $92,000 and had a depreciable life of
five years and a depreciable salvage value of $5,000. Using the
following depreciation methods; Straight Line, Sum-OfYears’ Digits,
Double Declining Balance, and MACRS(with a 5 year property
class):
a. Create a depreciation schedule
The owner has been offered to sell the machine in year 2 for
$50,000.
b. Calculate if the company will see a gain or...
Please show formulas using excel Build a spreadsheet: Construct an Excel spreadsheet to solve all of...
Please show formulas using excel
Build a spreadsheet: Construct an Excel spreadsheet to solve all
of the preceding requirements. Show how the solution will change if
the following data change: the April 1 work-in-process costs were
$66,000 for direct material and $18,000 for conversion.
Work in process, April 1—10,000 units: Direct material: 100%
complete, cost of
.........................................................................................................$
22,000
Conversion: 20% complete, cost of
.................................................................................................................
4,500
Balance in work in process, April 1
..................................................................................................................$
26,500
Units started during April
......................................................................................................................................100,000
Units...
PLEASE DO BY HAND AND NOT EXCEL Suppose we have the following data on variable X...
PLEASE DO BY HAND AND NOT EXCEL
Suppose we have the following data on variable X (independent)
and variable Y (dependent):
X Y
2 70
0 70
4 130
a. Test to see whether X and Y are significantly related using a
t-test on the slope of X. Test this at the 0.05 level.
b. Test to see whether X and Y are significantly related using
an F-test on the slope of X. Test this at the 0.05 level.
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