Multiple cash

budgetslong dash—Scenario

analysis   ​Brownstein, Inc., expects sales of $101,000 during each of the next 3 months. It will make monthly purchases of $56,000 during this time. Wages and salaries are $ 10,000 per month plus 6 %of sales. Brownstein expects to make a tax payment of $25,000 in the next month and a $19,000 purchase of fixed assets in the second month and to receive $8,000 in cash from the sale of an asset in the third month. All sales and purchases are for cash. Beginning cash and the minimum cash balance are assumed to be zero.

a. Construct a cash budget for the next 3 months.

b. Brownstein is unsure of the sales​ levels, but all other figures are certain. If the most pessimistic sales figure is $81,000

per month and the most optimistic is $121,000 per​ month, what are the monthly minimum and maximum ending cash balances that the firm can expect for each of the​ 1-month periods?

c. Briefly discuss how the financial manager can use the data in parts a. and b. to plan for financing needs.

A japanese comapny has a bond outstanding that sells for 91.53 percent of its 100,000 par value. The bond has a coupon rate of 3.4 percent paid annually and matures in 16 years. What is the yield to maturity of this bond?

Settlement date = 1/1/2000

Maturity date = 1/1/2016

Annual coupon rate = 3.4%

Coupons per year = 1

Face value (% of par) = 100

Bond price (% of par) = 91.530

Face value = 100,000

Please answer in exel format: =Yeild(settlement, matruity, rate, pr, redemption, frequency)

Do you think it makes sense to do a seed round of financing? Why or why not?

Project Analysis: You are considering a new product launch. The project will cost $760,000, have a four year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 420 units per year; price per unit will be $17,200; variable cost per unit will be $14,300; and fixed costs will be $640,000 per year. The required return on the project is 15 percent, and the relevant tax rate is 35 percent.

a. Based on your experience, you think the unit sales, variable cost, and fixed cost projections given here are probably accurate to within +- 10 percent. What are the upper and lower bounds for these projections? What is the base case NPV? What are the best case and worst case scenarios?

b. Evaluate the sensitivity of your base case NPV to changes in fixed costs.

c. What is the accounting break even level of output for this project?

USIL Company has developed a new detergent that can be sold for KES 350 per unit. The company has undertaken market research at a cost of KES 12 million in order to forecast the future cash flows of the investment project. The detergent is expected to continue gaining popularity for many years. The Chief Finance Officer has, however, proposed that investment in the new product should be evaluated over a four-year time-horizon, (even though sales would continue after the fourth year), on the grounds that cash flows after four years are too uncertain to be included in the evaluation. The variable and fixed costs (both in current price terms) are as follows:

The forecasted sales volumes are as follows:

The machinery required for production of the new detergent line would cost KES 200 million. An additional initial investment of KES 125 million will be needed for working capital. Plato Manufacturing Company pays corporate tax at the rate of 30% per year, payable one year in arrears. Selling price and cost information are in current price terms, before applying selling price inflation of 6% per year, variable cost inflation of 4 % per year and fixed cost inflation of 6% per year.

USIL Company uses an after-tax cost of capital of 14% to appraise all new capital projects. Assume that production lasts for only the four years under consideration above, calculate the NPV of investing in the new machine and advice if it’s financially acceptable (work to two decimal places).

Select a multinational company from the following industries:

Retail

Pharmaceutical

Computer Hardware

Manufacturing

Automotive

Review the selected company's most recent financial statements.

Calculate the following cash conversion cycle ratios based on the financial statements using Microsoft^® Excel^®:

Average inventory

Inventory turnover rate

Average account receivable

Account receivable turnover

Average collection cycle

The most recent financial statements for Crosby, Inc., follow. Sales for 2018 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. CROSBY, INC. 2017 Income Statement Sales $ 748,000 Costs 583,000 Other expenses 19,000 Earnings before interest and taxes $ 146,000 Interest paid 15,000 Taxable income $ 131,000 Taxes (25%) 32,750 Net income $ 98,250 Dividends $ 29,475 Addition to retained earnings 68,775 CROSBY, INC. Balance Sheet as of December 31, 2017 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 20,740 Accounts payable $ 54,900 Accounts receivable 43,680 Notes payable 14,100 Inventory 92,960 Total $ 69,000 Total $ 157,380 Long-term debt $ 131,000 Fixed assets Owners’ equity Net plant and equipment $ 424,000 Common stock and paid-in surplus $ 115,000 Retained earnings 266,380 Total $ 381,380 Total assets $ 581,380 Total liabilities and owners’ equity $ 581,380 In 2017, the firm operated at 75 percent of capacity. Construct the pro forma income statement and balance sheet for the company. Assume that fixed assets are sold so that the company has a 100 percent asset utilization. (Do not round intermediate calculations.)

Aday Acoustics, Inc., projects unit sales for a new 7-octave voice emulation implant as follows: Year Unit Sales 1 73,800 2 79,200 3 84,600 4 82,100 5 68,700 Production of the implants will require $1,460,000 in net working capital to start and additional net working capital investments each year equal to 20 percent of the projected sales increase for the following year. Total fixed costs are $3,700,000 per year, variable production costs are $141 per unit, and the units are priced at $323 each. The equipment needed to begin production has an installed cost of $18,300,000. Because the implants are intended for professional singers, this equipment is considered industrial machinery and thus qualifies as 7-year MACRS property. In five years, this equipment can be sold for about 25 percent of its acquisition cost. The company is in the 21 percent marginal tax bracket and has a required return on all its projects of 15 percent. MACRS schedule. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 23 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 0 Year 1 Year 2 Year 3 Year 4 Investment $ 28,100 Sales revenue $ 15,200 $ 16,800 $ 18,200 $ 14,700 Operating costs 3,800 3,550 6,000 4,600 Depreciation 7,025 7,025 7,025 7,025 Net working capital spending 390 290 405 240 ? a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative amount should be indicated by a minus sign.) c. Suppose the appropriate discount rate is 10 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

What are the three major types of mistakes made in the application of the DCF process, in real estate investment?

You will retire 20 years from now, and you think you will need an income of $6,000 per month for 20 years after you retire. You will begin saving for retirement by saving $700 per month for the next 10 years. How much will you have to save each month in the 10 years after that to have enough to meet your retirement goal? The interest rate is 9% APR. Round your answer to the nearest dollar.

You will retire 20 years from now, and you think you will need an income of $6,000 per month for 20 years after you retire.

You will begin saving for retirement by saving $700 per month for the next 10 years. How much will you have to save each month in the 10 years after that to have enough to meet your retirement goal?

The interest rate is 9% APR.

Round your answer to the nearest dollar.

Tara's lawyer gave her the following two options to settle her invoice:
(a) $2,000.00 in 1 month and the balance of $2,100.00 in 3 months.
(b) Two equal payments, one in 37 days and the other in 5 months.
If money earned 2.50% p.a., what was the value of the equal payments in Option (b) such that it is equivalent to the payments in Option (a)? Use now as the focal date for this question.
Round to the nearest cent