Question
In: Finance
You’re a publisher of University Mac Books. A teacher at MSU has written a new Finance text...
You’re a publisher of University Mac Books. A teacher at MSU has written a new Finance text book & has asked your firm to prepare & print the text book. She is willing to commit to purchasing 22,000 text books over four years. You are at full production, so you need to purchase new printing equipment at a cost of $3.6Million which will be depreciated on a straight line basis over the life of the project & can be sold for $275,000 at the end of 4 years. Additionally, you will need $130,000 in excess working capital which you can recoup later. Fixed costs are $730,000 and variable costs are $50. While this is a customized version, you believe you can sell the text book to other universities as well and, project those sales at 4,500, 12,500, 15,000, & 7,500 at $150 per unit. Your CFO requires that all projects have an NPV of $100,000. Your firms tax rate is 24% and cost of capital is 13%. What price (per textbook) should you bid on the commitment of 22,000?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
PLEASE POST IN EXCEL WITH SOLUTIONS! You’re a publisher of University Mac Books. A teacher at...
PLEASE POST IN EXCEL WITH SOLUTIONS!
You’re a publisher of University Mac Books. A teacher at MSU has
written a new Finance text book & has asked your firm to
prepare & print the text book. She is willing to commit to
purchasing 22,000 text books over four years. You are at full
production, so you need to purchase new printing equipment at a
cost of $3.6Million which will be depreciated on a straight line
basis over the life of...
PLEASE post USing EXCEL WITH SOLUTIONS! You’re a publisher of University Mac Books. A teacher at...
PLEASE post USing EXCEL WITH SOLUTIONS!
You’re a publisher of University Mac Books. A teacher at MSU has
written a new Finance text book & has asked your firm to
prepare & print the text book. She is willing to commit to
purchasing 22,000 text books over four years. You are at full
production, so you need to purchase new printing equipment at a
cost of $3.6Million which will be depreciated on a straight line
basis over the life of...
A publisher of books has produced seven comparable Statistical Management books with the following costs. Quantity...
A publisher of books has produced seven comparable Statistical
Management books with the following costs.
Quantity
produced
(000)
1
2
4
5
7
9
13
Manufacturing Cost(000£)
5
5.9
6.5
7.5
8
9.5
10.8
a) (5 pts) Construct the regression line for predicting
manufacturing costs from quality produced.
b) (5 pts) Calculate the predicted values and the residuals of
this data.
c) (5 pts) Construct a 99% two-sided confidence interval for the
intercept.
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each to University of the West Indies (UWI) in 2019. These books
cost Clarkesville $62 each to produce. In the marketing of the
books, the Company paid $4,600 to a marketing firm, and it also
borrowed $50,000 on January 1, 2019, on which the Company paid 10
percent interest. Both interest and principal are paid on December
21, 2019. Depreciation expense for the year was $8,000 and
Clarksville’s tax rate...
2. Clarksville Printing Company sold 1,500 finance books for $85 each to University of the West...
2. Clarksville Printing Company sold 1,500 finance books for $85
each to University of the West Indies (UWI) in 2019. These books
cost Clarkesville $62 each to produce. In the marketing of the
books, the Company paid $4,600 to a marketing firm, and it also
borrowed $50,000 on January 1, 2019, on which the Company paid 10
percent interest. Both interest and principal are paid on December
21, 2019. Depreciation expense for the year was $8,000 and
Clarksville’s tax rate...
Stein Books Inc. sold 1,900 finance textbooks for $250 each to High Tuition University in 20X1....
Stein Books Inc. sold 1,900 finance textbooks for $250 each to
High Tuition University in 20X1. These books cost $210 to produce.
Stein Books spent $12,200 (selling expense) to convince the
university to buy its books.
Depreciation expense for the year was $15,200. In addition,
Stein Books borrowed $104,000 on January 1, 20X1, on which the
company paid 12 percent interest. Both the interest and principal
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Your company needs to raise $46 million to finance a new factory. You’re evaluating two different...
Your company needs to raise $46 million to finance a new
factory. You’re evaluating two different 25-year bonds to raise
these funds: a coupon bond with an annual coupon rate of 7 percent;
and a zero coupon bond. Your company’s tax rate is 30 percent. Both
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bonds will have a par value of $1,000 and a required
annual return of 8 percent with semi-annual compounding.
a-1.
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A university has 7 departments namely, IT, Finance, HR, Management, Faculty, students and R&D. The university...
A university has 7 departments namely, IT, Finance,
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has an ADSL internet connection which is shared for the different
departments. It is required that all the departments should have
intercommunication via LAN. Each of the department contain 50-200
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have access to Wi-Fi connectivity as well. The university campus
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A university has 7 departments namely, IT, Finance, HR, Management, Faculty, students and R&D. The university...
A university has 7 departments namely, IT, Finance, HR,
Management, Faculty, students and R&D. The university also has
an ADSL internet connection which is shared for the different
departments. It is required that all the departments should have
intercommunication via LAN. Each of the department contain 50-200
users.
As the case everywhere, the students and the staffs need to have
access to Wi-Fi connectivity as well. The university campus
contains 3 different buildings located nearby, having 2, 3 and 4...
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