Suppose you want to find the nonoperating cash flow in the last year of the project. This includes the effects associated with the salvage value,cleanup and removal expenses, and working capital. The variables and values are: cash received on sale of old equipment (S) = $20,000; tax rate (T) = 0.4; book value of old equipment (B) = 5,000; before-tax cleanup and removal expenses (REX) = $15,000; and, release of net working (W) = $5,000.

What is the nonoperating cash flow in the last year of the project?

Group of answer choices

$11,000

$12,000

$10,000

$13,000

Your division is considering two projects with the following cash flows (in millions):

1. What are the projects' NPVs assuming the WACC is 5%? Round your answer to two decimal places. Do not round your intermediate calculations. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
   Project A    $   million
   Project B    $   million

   What are the projects' NPVs assuming the WACC is 10%? Round your answer to two decimal places. Do not round your intermediate calculations. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
   Project A    $   million
   Project B    $   million

   What are the projects' NPVs assuming the WACC is 15%? Round your answer to two decimal places. Do not round your intermediate calculations. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative value should be indicated by a minus sign.
   Project A    $   million
   Project B    $   million

2. What are the projects' IRRs assuming the WACC is 5%? Round your answer to two decimal places. Do not round your intermediate calculations.
   Project A   %
   Project B   %

   What are the projects' IRRs assuming the WACC is 10%? Round your answer to two decimal places. Do not round your intermediate calculations.
   Project A   %
   Project B   %

   What are the projects' IRRs assuming the WACC is 15%? Round your answer to two decimal places. Do not round your intermediate calculations.
   Project A   %
   Project B   %

3. If the WACC was 5% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 3.86%.)  
   -Select-Project AProject BNeither A, nor BItem 13

   If the WACC was 10% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 3.86%.)  
   -Select-Project AProject BNeither A, nor BItem 14

   If the WACC was 15% and A and B were mutually exclusive, which project would you choose? (Hint: The crossover rate is 3.86%.)

1. Project A cost $1,000 and Project B cost $1,000, there expected net cash inflows are shown on the timeline below and there WACC is 9.00%. What is Project B's Discounted Payback?

WACC 9.00%

                      0              1              2               3              4

                        l              l               l                l                l

ProjA      -$1,000         $675       $650

ProjB   -$1,000       $1,000   $700        $50           $50

1. Project A cost $1,050 and Project B cost $1,050, there expected net cash inflows are shown on the timeline below and there WACC is 9.00%. What is the Discounted Payback for Project A?

  WACC 9.00%

                   0              1              2               3              4

                   l                l               l                l               l        

ProjA    -$1,050       $675        $650

ProjB   -$1,050    $360        $360        $360        $360

What are compensating balances of a US corporate bank account and how may they affect that corporation’s working capital?

At what WACC would there be a break-even between the two projects?

1. 7.23%
2. 8.48%
3. 7.57%
4. 7.89%
5. What is the NPV for Project A assuming the WACC is 10%?
   1. $5,653.94
   2. $10,522.64
   3. $6,219.33
   4. $11,574.90
6. What is the IRR for Project B?
   1. 11.2%
   2. 13.9%
   3. 11.6%
   4. 10.9%

3. What is the discounted payback period of Project A assuming the WACC is 10%?
   1. 4.1 years
   2. 5.5 years
   3. 5.1 years
   4. 4.9 years

Topperton Company has developed a new industrial product. An outlay of $8 million is required for equipment to produce the new product, and additional net working capital of $400,000 is required to support production and marketing. In addition, a one-time $400,000 (before-tax) expense will be incurred the year that the equipment is placed into service. The equipment will be depreciated on a straight-line basis to a zero book value over 6 years. Although the depreciable life is 6 years, the project is expected to have a productive life of 8 years, and it is estimated that the equipment can be sold for $1 million at that time. Revenues minus expenses are expected to be $3 million per year. The cost of capital for this project is 14%, and the relevant tax rate is 30%. What is the NPV of the new product?

$2,956,923

$3,326,891

$3,002,696

None of these

You are thinking of buying a machine that has a 4-year useful life, and would require an initial outlay of $240,000. The machine would be depreciated to a zero book value over 4 years on a straight-line basis, so depreciation would be $60,000 per year. The machine would generate an incremental increase in operating income of $100,000 per year in real terms before taxes, and the relevant tax rate is 40%. Inflation (i) is expected to be 8% per year, and the project's required return in real terms would be r_r = 10%. What is the net present value of this machine?

Group of answer choices

-$17,505

$13,762

-$22,944

$26,269

Dog Up! Franks is looking at a new sausage system with an installed cost of $626,691. This cost will be depreciated straight-line to 56,970 over the project's 7-year life, at the end of which the sausage system can be scrapped for $88,788. The sausage system will save the firm $173,036 per year in pretax operating costs, and the system requires an initial investment in net working capital of $63,590. If the tax rate is 0.36 and the discount rate is 0.12, what is the total cash flow in year 7? (Make sure you enter the number with the appropriate +/- sign)

Calculate discounted payback. Please show steps

9.15

Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 5% rate. Dantzler's WACC is 11%.

1. What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places.
   $ _____ million
   
2. What is the firm's market value today? Assume that Dantzler has zero non-operating assets. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round intermediate calculations. Round your answer to two decimal places.
   $ ____ million
   
3. Suppose Dantzler has $148.90 million of debt and 6 million shares of stock outstanding. What is your estimate of the current price per share? Write out your answer completely. For example, 0.00025 million should be entered as 250. Do not round intermediate calculations. Round your answer to the nearest cent.
   $ ____

During one of the lectures, typical royalty rates were discussed. What would the range of typical (medium) royalty rates be for: a. A firm that licenses its technology that provides a minor improvement to an existing technology or process? b. A firm that licenses its technology that provides a revolutionary improvement to a technology or process?

It has been argued in the finance literature that great majority of mergers lead to value destruction. Citing empirical evidence, discuss whether you agree or disagree with this statement.

1. Given all-time low interest rates, companies should borrow long term and use the borrowed money to takeover other firms. Discuss with suitable reasons, citing empirical evidence, whether you agree or disagree with this statement