Maytag Company is analyzing a proposed 5-year project using standard sensitivity analysis. The company expects to sell 18,000 units, ±5 percent. The expected variable cost per unit is $10.50 and the expected fixed costs are $28,000. The fixed and variable cost estimates are considered accurate within a ±5 percent range. The sales price is estimated at $16.70 a unit, ±5 percent. The project requires an initial investment of $198,000 for equipment that will be depreciated using the straight-line method to zero over the project's life. The equipment can be sold for $25,000 at the end of the project. The project requires $20,000 in net working capital up front. The discount rate is 14 percent and tax rate is 25 percent. What is the operating cash flow in year 2 under the optimistic case scenario?
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$101,218 |
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|
$97,113 |
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$92,346 |
||
|
$87,595 |
||
|
$107,431 |
In: Finance
Omnicom Group is considering spending $350,000 at Time 0 to test a new product. Depending on the test results, the company may decide to spend $786,000 at Time 1 to start production of the product. If the product is introduced and it is successful, it will produce aftertax cash flows of $654,000 a year for Years 2 through 5. The probability of successful test and investment is 60 percent. What is the net present value at Time 0 given a 14 percent discount rate?
$239,246.24
$231,875.30
$238,579.49
$243,618.25
$249,864.27
In: Finance
construct a 10 year amortizing loan table with 8% interest rate. You borrow $30,000 initially and repay it in your ten equal annual year-end payments. Show only the first three years.
In: Finance
In Chapter 7 the concept of efficient markets is discussed. An efficient market is one in which there are many buyers and sellers analyzing securities, and security prices react quickly to new information. How efficient do you think our stock market is? If it is not perfectly efficient, what prevents it from being so? What are ways to make it more efficient?
In: Finance
construct a 10 year amortizing loan table with 8% interest rate. You borrow $30,000 initially and repay it in your ten equal annual year end payments. show only the first 3 steps.
In: Finance
You want to buy a new sports coupe for $26,500 and the finance office at the dealership has quoted you an 11.9% APR loan for 60 months to buy the car. What will your monthly payments be? What is the effective annual rate on this loan?
In: Finance
In: Finance
|
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $795 per set and have a variable cost of $355 per set. The company has spent $200,000 for a marketing study that determined the company will sell 65,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 11,000 sets of its high-priced clubs. The high-priced clubs sell at $1,165 and have variable costs of $625. The company will also increase sales of its cheap clubs by 13,000 sets. The cheap clubs sell for $385 and have variable costs of $175 per set. The fixed costs each year will be $10,050,000. The company has also spent $1,500,000 on research and development for the new clubs. The plant and equipment required will cost $37,800,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net working capital of $2,200,000 that will be returned at the end of the project. The tax rate is 25 percent, and the cost of capital is 13 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.) |
In: Finance
You are the recipient of a gift that will pay you $25,000 one year from now and every year thereafter for the following 24 years. The payments will increase in value by 2.5 percent each year. If the appropriate discount rate is 8.5 percent, what is the present value of this gift? STEPS FOR BAII PLUS CALCULATOR PLEASE!
In: Finance
We are evaluating a project that costs $856,800, has a nine-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 90,000 units per year. Price per unit is $56, variable cost per unit is $40, and fixed costs are $770,000 per year. The tax rate is 25 percent, and we require a return of 12 percent on this project
. 2. What is the degree of operating leverage at the accounting break-even point? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
b-1. Calculate the base-case cash flow and NPV. (Do not round intermediate calculations. Round your cash flow answer to the nearest whole number, e.g., 32. Round your NPV answer to 2 decimal places, e.g., 32.16.)
b-2. What is the sensitivity of NPV to changes in the quantity sold? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c. What is the sensitivity of OCF to changes in the variable cost figure? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. )
In: Finance
1) Dob Co has a Beta of 1.32 at a time when the expected market return is 8.7% and the risk free rate is 2.2%. What is Dob Co's expected return?
(Enter your response as a percentage with two decimal places, ex: 12.34).
2) If the market risk premium is 11%, the risk-free rate is 3.8%, and Nate Corp has a beta of 2.03, what is the required return for Nate Corp?
(Enter your response as a percentage with two decimal places, ex: 12.34)
3) What is the price of bond paying a coupon rate of 4.5% that has a par value of $1000, and has 7 years to maturity with a Yield to Maturity of 2.3%?
(Enter the absolute value of your response to two decimal places, ex: 123.45 NOT -123.45)
4) What is the yield to maturity for a bond with 12 years to maturity, a coupon rate of 4.5% making payments semi-annually, a face value of $1000 if it currently sells for $957?
(Enter your response as a percentage with two decimal places, ex: 12.34)
Please get me the answer for all the 4 question please.. please please
In: Finance
Q.333 The Endot Manufacturing Company, a manufacturer and wholesaler of widgets, has provided you with the following financial information. The Company has asked you to make an analysis of the firm’s financial condition. In addition to the information given below, you have been informed that the firm has no lease payments but has principal payments of $2 million per year on its Long-term debt. Endot uses a 365-day year in preparing its ratios. Endot has 5,000,000 common shares outstanding. Endot’s financial statements are as follows:
Balance Sheet as of December 31, 2014 (Millions of Dollars)
Cash
45
Accounts Payable
45
Marketable Securities
33
Notes Payable
45
Accounts Receivable
66
Other Current Liabilities
21
Inventory
159
Total Current Liabilities
111
Total Current Assets
303
Total Long Term Liabilities
24
Total Liabilities
135
Gross Fixed Assets
225
Less Depreciation
78
Common Stock
114
Net Fixed Assets
147
Retained Earnings
201
Total Shareholder Equity
315
Total Assets
450
Total Liabilities and Equity
450
Statement of Income and Expenses for Year Ended December 31, 2014 (Millions of Dollars)
Net Sales
795.0
Costs of Goods Sold
660.0
Gross Profit
135.0
Fixed Expense
73.5
EBITDA
61.5
Depreciation Expense
12.0
EBIT
49.5
Interest Expense
4.5
EBT
45.0
Taxes (40%)
18.0
Net Income
27.0
What was Endot's Quick (Acid Test) Ratio?
a. 0.37
b. 1.30
c. 1.73
d. 2.00
e. 2.73
Q 388 The Endot Manufacturing Company, a manufacturer and wholesaler of widgets, has provided you with the following financial information. The Company has asked you to make an analysis of the firm’s financial condition. In addition to the information given below, you have been informed that the firm has no lease payments but has principal payments of $2 million per year on its Long-term debt. Endot uses a 365-day year in preparing its ratios. Endot has 5,000,000 common shares outstanding. Endot’s financial statements are as follows:
Balance Sheet as of December 31, 2014 (Millions of Dollars)
Cash
45
Accounts Payable
45
Marketable Securities
33
Notes Payable
45
Accounts Receivable
66
Other Current Liabilities
21
Inventory
159
Total Current Liabilities
111
Total Current Assets
303
Total Long Term Liabilities
24
Total Liabilities
135
Gross Fixed Assets
225
Less Depreciation
78
Common Stock
114
Net Fixed Assets
147
Retained Earnings
201
Total Shareholder Equity
315
Total Assets
450
Total Liabilities and Equity
450
Statement of Income and Expenses for Year Ended December 31, 2014 (Millions of Dollars)
Net Sales
795.0
Costs of Goods Sold
660.0
Gross Profit
135.0
Fixed Expense
73.5
EBITDA
61.5
Depreciation Expense
12.0
EBIT
49.5
Interest Expense
4.5
EBT
45.0
Taxes (40%)
18.0
Net Income
27.0
If Endot's common stock is currently selling for $104.49 per share, what is Endot's Price to Earnings Ratio?
a.
580.5X
b.
104.49X
c.
41.8X
d.
19.35X
e.
It is impossible to determine the P/E ratio from the information given
In: Finance
Pick any real world company that you've worked for or are interested in and write about what kinds of capital they have raised or are raising. (200words)
In: Finance
|
Year 1 |
Year 2 |
||
|
Revenues |
126.1126.1 |
155.6155.6 |
|
|
COGS and Operating Expenses (other than depreciation) |
36.236.2 |
57.157.1 |
|
|
Depreciation |
28.128.1 |
39.139.1 |
|
|
Increase in Net Working Capital |
2.32.3 |
8.68.6 |
|
|
Capital Expenditures |
28.528.5 |
37.637.6 |
|
|
Marginal Corporate Tax Rate |
3535% |
3535% |
a. What are the incremental earnings for this project for years 1 and 2? (Note: Assume any incremental cost of goods sold is included as part of operating expenses.)
b. What are the free cash flows for this project for years 1 and 2?
a. What are the incremental earnings for this project for years 1 and 2? (Note: Assume any incremental cost of goods sold is included as part of operating expenses.)
Calculate the incremental earnings of this project below: (Round to one decimal place.)
|
Incremental Earnings Forecast (millions) |
Year 1 |
|
|
Sales |
$ |
|
|
Operating Expenses |
$ |
|
|
Depreciation |
$ |
|
|
EBIT |
$ |
|
|
Income tax at 35% |
$ |
|
|
Unlevered Net Income |
$ |
In: Finance
|
Weston Industries has a debt–equity ratio of 1.1. Its WACC is 8.2 percent, and its pretax cost of debt is 6.4 percent. The corporate tax rate is 35 percent. |
| a. |
What is the company’s cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Cost of equity capital | % |
| b. |
What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Unlevered cost of equity capital | % |
| c-1. |
What would the cost of equity be if the debt–equity ratio were 2? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Cost of equity | % |
| c-2. |
What would the cost of equity be if the debt–equity ratio were 1.0? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Cost of equity | % |
| c-3. |
What would the cost of equity be if the debt–equity ratio were zero? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) |
| Cost of equity | % |
In: Finance