Given the following list, indicate if each entry normally is an item related to the ongoing core business of a company. Enter “Yes” if it normally relates to the ongoing core business and “No” of it does not.
A) Litigation-related charges:
B) Royalty expense:
C) Impairment of goodwill:
D) Restructuring charges:
E) SG&A expense:
F) R&D expense:
G) Gains and losses on the sale of assets:
H) Amortization of acquired intangibles:
I) Purchased R&D expense:
J) Asset write-offs:
In: Finance
|
Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: |
| Year | Cash Flow | ||
| 0 | –$ | 1,180,000 | |
| 1 | 355,000 | ||
| 2 | 420,000 | ||
| 3 | 315,000 | ||
| 4 | 270,000 | ||
|
All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are “blocked” and must be reinvested with the government for one year. The reinvestment rate for these funds is 4 percent. |
|
If Anderson uses a required return of 8 percent on this project, what are the NPV and IRR of the project? |
In: Finance
Prepare a pro-forma statement by using assumptions to calculate the annual operating net cash flow for three years to calculate the the NPV and IRR.
Assess project feasibility using NPV and IRR method.
Company is Z-energy
For the data part you can refer to the Yahoo finance or assume any relevant data according to the company
In: Finance
John’s Weed-B-Gone yard service sprays lawns to rid them of weeds. John mixes the two chemicals, Weed-X and Pest-O, in proportions depending on the climate and the particular weed problems of the season. A standard mix calls for a gallon of the mixture to combine equal parts of Weed-X and Pest-O. Weed-X has a standard cost of $9.80 per gallon and Pesto-O has a standard cost of $25.00 per gallon. Each gallon can treat 100 square yards of lawn. John expects to treat 536,000 square yards of lawn.
For the past season, John treated 653,000 square yards. He used 3,300 gallons of Weed-X and 3,100 gallons of Pest-O. He paid a total of $30,030 for the Weed-X and $76,260 for the Pest-O.
Required:
a. Compute the materials price and efficiency variances for the season. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
b. Compute the materials mix and yield variances for the season. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
In: Finance
Question Nine
Mr West decides to deposit $5000 in a BankEast Ltd account that pays 8% p.a. continuously compounded. What will be his account balance in five years?
Question Ten
Norton Industries Pty Ltd is looking at investing in Project X that is expected to generate the following cash flows each year for six years.
|
Year 0 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Year 6 |
|
$1 million |
$1.5 million |
$2 million |
$2.5 million |
$3 million |
$3.5 million |
Suppose similar investments are paying a return of 10% pa compounded semi-annually. How much should the Project X cost Norton Industries?
Please show works, don't use excel.
In: Finance
(MIRR) Star Industries owns and operates landfills for several municipalities throughout the Midwestern part of the U.S. Star typically contracts with the municipality to provide landfill services for a period of 20 years. The firm then constructs a lined landfill (required by federal law) that has capacity for five years. The $9.6 million expenditure required to construct the new landfill results in negative cash flows at the end of years 5, 10, and 15. This change in sign on the stream of cash flows over the 20-year contract period introduces the potential for multiple IRRs, so Star's management has decided to use the MIRR to evaluate new landfill investment contracts. The annual cash inflows to Star begin in year 1 and extend through year 20 are estimated to equal $3.5 million (this does not reflect the cost of constructing the landfills every five years). Star uses a 10.4% discount rate to evaluate its new projects, so it plans to discount all the construction costs every five years back to year 0 using this rate before calculating the MIRR.
a.What are the project's NPV, IRR, and MIRR?
b.Is this a good investment opportunity for Star Industries? Why or why not?
In: Finance
Prepare a pro-forma statement by using assumptions to calculate the annual operating net cash flow for three years to calculate the the NPV and IRR.
Assess project feasibility using NPV and IRR method.
Company is Z-energy
For the data part you can refer to the Yahoo finance or assume any relevant data according to the company
In: Finance
Payback: Quebec Ltd is purchasing machinery at a cost of $4,424,766. The company expects, as a result, cash flows of $751,751, $1,196,086, and $2,756,146 over the next three years. The payback period is
years.
(Round your answer to 2 decimal places. All
intermittent calculations should be rounded to 4 decimal places
before carrying to next calculation.)
In: Finance
The present capital sructure is as follows :
1.800,000 R2 ordinary shares now trading at r2,50 per share preference
2. 250,000 preference shares trading at r2 per share (isuued at R3 per share).10% fixed rate of interest.
3.Abank loan of R1 500,000 AT 13% p.a (payable over 5 years.
Additional data: the company's beta is 1.3. The return on the market is 14% and the risk fee rate is 7%.
its current tax rate is 28&. its current divided is 40c per share and it expects its dividends to grow by 8%.
You are required to : Assuming that the company uses the Sividend growth model to calculate its cost of equity. Calculate its weighted average cost of capital.
If a further R500,000 is needed to finance te expansion ,which option should they use from eitherr ordinary shares, preference share or loan financing and why?
Please help with the calculations and explain
In: Finance
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $850 per set and have a variable cost of $410 per set. The company has spent $310,000 for a marketing study that determined the company will sell 69,700 sets per year for seven years. The marketing study also determined that the company will lose sales of 13,200 sets of its high-priced clubs. The high-priced clubs sell at $1,220 and have variable costs of $680. The company will also increase sales of its cheap clubs by 15,200 sets. The cheap clubs sell for $440 and have variable costs of $230 per set. The fixed costs each year will be $10,600,000. The company has also spent $2,600,000 on research and development for the new clubs. The plant and equipment required will cost $38,900,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $3,300,000 that will be returned at the end of the project. The tax rate is 21 percent, and the cost of capital is 9 percent.
a. Calculate the payback period. (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) \
b. Calculate the NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c. Calculate the IRR. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a.Payback period:_______years
b. NPV____
c.IRR
In: Finance
ABC Corp is considering an ‘easing’ of credit policy to expand sales. The following data has been assembled:
Additional Sales: $1,000,000
Production/marketing Costs= 60% of Sales.
Collection Costs = 12% of Sales.
Bad Debts= 16% of sales.
Tax Rate = 10%
Accts Receivable turnover = 5
Inventory Turnover= 4
Cost of Capital= 15%
Q1:Project Net Income (after taxes) on additional sales.
Q2:What is the additional required investment in Inventory?
Q3 :What is the additional required investment in A/R?
Q4 :What is the return on the total additional investment?
Q5 :Should the company ease it’s credit policy?Justify response.
In: Finance
Methods of Planner Compensation
When a planner and client establish their relationship, an agreement will be made regarding the method of compensation.
Do you believe an ideal method exists?
Is a particular model such as fee or commission preferable or is the best option situational?
Why would you prefer your stated method if hiring a planner?
In: Finance
Reynolds Enterprises is attempting to evaluate the feasibility of investing $85,000, CF0, in a machine having a 5-year life. The firm has estimated the cash inflows associated with the proposal as shown below. The firm has a 12 percent cost of capital.
| End of Year (t) | Cash Inflows (CFt) |
| 1 | $18,000 |
| 2 | $22,500 |
| 3 | $27,000 |
| 4 | $31,500 |
| 5 | $36,000 |
a. Calculate the payback period for the proposed investment.
b. Calculate the NPV for the proposed investment.
c. Calculate the IRR for the proposed investment.
d. Evaluate the acceptability of the proposed investment using NPV and IRR. What recommendation would you make relative to implementation of the project? Why?
In: Finance
• Describe strategies to minimize global water footprints.
In: Finance
Betsy Birdsong, an interior designer, has made plans to definitely retire in three years. She has begun to downsize her business and is moving out of the 2,000 square foot commercial condominium she owns in a prestigious business park. Betsy does not wish to sell at this time, so she has decided to offer the condominium as a lease-purchase option. While she hasn't decided on a purchase price, she is adamant about the lease term: a three-year lease with a two-year option (for the first two years only).
What is your opinion as to why she would require such a lease term?
In: Finance