Shai Co. is considering a four-year project that will require an initial investment of $7,000. The base-case cash flows for this project are projected to be $14,000 per year. The best-case cash flows are projected to be $26,000 per year, and the worst-case cash flows are projected to be -$4,500 per year. The company’s analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that there is a 25% probability of the project generating the best-case cash flows and a 25% probability of the project generating the worst-case cash flows.

What would be the expected net present value (NPV) of this project if the project’s cost of capital is 12%?

$30,587

$24,470

$29,058

$35,175

Shai now wants to take into account its ability to abandon the project at the end of year 2 if the project ends up generating the worst-case scenario cash flows. If it decides to abandon the project at the end of year 2, the company will receive a one-time net cash inflow of $4,750 (at the end of year 2). The $4,750 the company receives at the end of year 2 is the difference between the cash the company receives from selling off the project’s assets and the company’s -$4,500 cash outflow from operations. Additionally, if it abandons the project, the company will have no cash flows in years 3 and 4 of the project.

Using the information in the preceding problem, find the expected NPV of this project when taking the abandonment option into account.

$33,946

$30,551

$37,341

$42,433

What is the value of the option to abandon the project?     

Based on your understanding of depreciation and tax rates do you think that it makes sense for organizations to receive a tax benefit for depreciating capital assets? minimum 200 words

Nike, Inc., with headquarters in Beaverton, Oregon, is one of the world’s leading manufacturers of athletic shoes and sports apparel. The following activities occurred during a recent year. The amounts are rounded to millions, except for par value.

1. Purchased additional buildings for $303 and equipment for $1,202; paid $432 in cash and signed a long-term note for the rest.

2. Issued 10 shares of $1 par value common stock for $695 cash.

3. Declared $1,159 in dividends to be paid in the following year.

4. Purchased additional short-term investments for $5,928 cash.

5. Several Nike investors sold their own stock to other investors on the stock exchange for $7,150.

6. Sold $2,423 in short-term investments for $2,423 in cash.

For each of the events (a) through (f), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for increase and − for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. (If no impact on the accounting equation leave cells blank. Enter your answers in millions.)

Your company has been approached to bid on a contract to sell 20,000 voice recognition (VR) computer keyboards per year for four years. Due to technological improvements, beyond that time they will be outdated and no sales will be possible. The equipment necessary for the production will cost $4,100,000 and will be depreciated on a straight-line basis to a zero salvage value. Production will require an investment in net working capital of $145,000 to be returned at the end of the project, and the equipment can be sold for $265,000 at the end of production. Fixed costs are $800,000 per year and variable costs are $44 per unit. In addition to the contract, you feel your company can sell 4,700, 12,300, 14,300, and 7,600 additional units to companies in other countries over the next four years, respectively, at a price of $125. This price is fixed. The tax rate is 24 percent, and the required return is 13 percent. Additionally, the president of the company will undertake the project only if it has an NPV of $200,000. What bid price should you set for the contract? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

With the growing popularity of casual surf print clothing, two recent MBA graduates decided to broaden this casual surf concept to encompass a “surf lifestyle for the home.” With limited capital, they decided to focus on surf print table and floor lamps to accent people’s homes. They projected unit sales of these lamps to be 10,600 in the first year, with growth of 8 percent each year for the next five years. Production of these lamps will require $57,000 in net working capital to start. Total fixed costs are $143,000 per year, variable production costs are $17 per unit, and the units are priced at $60 each. The equipment needed to begin production will cost $605,000. The equipment will be depreciated using the straight-line method over a 5-year life and is not expected to have a salvage value. The tax rate is 21 percent and the required rate of return is 17 percent. What is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Eggz, Inc., is considering the purchase of new equipment that will allow the company to collect loose hen feathers for sale. The equipment will cost $440,000 and will be eligible for 100 percent bonus depreciation. The equipment can be sold for $54,000 at the end of the project in 5 years. Sales would be $287,000 per year, with annual fixed costs of $50,000 and variable costs equal to 37 percent of sales. The project would require an investment of $31,000 in NWC that would be returned at the end of the project. The tax rate is 23 percent and the required return is 10 percent. Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Western Tech is considering a new project that will require $118,000 of fixed assets and net working capital of $16,000. The fixed assets will be depreciated on a straight-line basis to a zero salvage value over three years. Ignore bonus depreciation. This project is expected to produce an operating cash flow of $45,000 the first year with that amount decreasing by 5 percent annually for two years before the project is shut down. The fixed assets can be sold for $55,000 at the end of the project and all net working capital will be recovered. What is the net present value of this project at a discount rate of 11.5 percent and a tax rate of 23 percent? Multiple Choice −$3,770.30 −$5,456.32 $3,209.17 $12,136.54 $15,311.09

Determine whether the following statement is true for false:
Given two bonds with the same price, face value, expiration date and yield, their coupons
payments must be identical.
Justify your answer by providing either a proof if true, or a counterexample if false

Note: the answer for part a is $34,261,363.64----- the rest are wrong, please get them right as I am reposting this question again and this is my LAST question I can post this billing period. Please please please don't submit unless 100% sure

Thank you and have a blessed day :)

You are considering a stock investment in one of two firms (NoEquity, Inc. and NoDebt, Inc.), both of which operate in the same industry and have identical operating income of $9.5 million. NoEquity, Inc. finances its $20 million in assets with $19 million in debt (on which it pays 10 percent interest annually) and $1 million in equity. NoDebt, Inc. finances its $20 million in assets with no debt and $20 million in equity. Both firms pay a tax rate of 30 percent on their taxable income.

Calculate the net income and return on assets for the two firms. (Enter your dollar answers in millions of dollars. Round all answers to 2 decimal places.)

In 2018, Usher Sports Shop had cash flows from investing activities of $420,000 and cash flows from financing activities of −$464,000. The balance in the firm’s cash account was $627,000 at the beginning of 2018 and $604,000 at the end of the year.

Calculate Usher Sports Shop’s cash flow from operations for 2018. (Amounts to be deducted should be indicated by a minus sign.)

Williamson Industries has $5 billion in sales and $1.004 billion in fixed assets. Currently, the company's fixed assets are operating at 95% of capacity.

1. What level of sales could Williamson Industries have obtained if it had been operating at full capacity? Write out your answer completely. For example, 25 billion should be entered as 25,000,000,000. Round your answer to the nearest cent.
   $  
2. 
   
3. What is Williamson's target fixed assets/sales ratio? Do not round intermediate calculations. Round your answer to two decimal places.
     %
4. 
   
5. If Williamson's sales increase 15%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio? Write out your answer completely. For example, 25 billion should be entered as 25,000,000,000. Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest cent.
   $