A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,000 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 8%. Ignore inflation.

a. Calculate project NPV for each company. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

b. What is the IRR of the after-tax cash flows for each company? (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal places.)

Explain what is meant by the time value of money, and discuss its relevance to the capital budgeting process.

Please type out and use a different answer in your own words that differ from what's already on the Chegg database, please and thank you!

Current position of the organisation: Provide an outline of goals and the philosophy of the organisation. Present the current target market and performance of the organisation.
2. Analysis of the business environment: Effectively assess the Micro-Environment, Market / Task environment and Macro-Environment of your organisation.
3. Roles and skills of managers: To discuss the overlapping roles of managers and the skills required of them in order to take the organisation. The management style of the management team and its relevance to the achievement of the organisational goals.   
4. Human Resources: An assessment of the organisations human resources in terms of skills, motivation and retention.   
5. Change Management: Ways in which management can react to the changing business environment. Discuss the inter-related approaches which the organisation can adopt in reacting to the environment.   
6. Organisation Design: The fundamental principles underlying organisation design should be discussed. Evaluate the organisational structure of the organisation and its suitability for the growth and expansion of the organisation
7. Recommendations: Present possible recommendations and critical success factors that the organisation should implement to achieve the desired goals.   

The following table tracks the main components of working capital over the life of a four-year project.

Calculate net working capital and the cash inflows and outflows due to investment in working capital. (Negative answers should be indicated by a minus sign.)

brief IRAC of case 40.1 Oliveira v. Sugarman

A bank has issued a six-month, $2.9 million negotiable CD with a 0.45 percent quoted annual interest rate (i_{CD, sp}).

a. Calculate the bond equivalent yield and the EAR on the CD.
b. How much will the negotiable CD holder receive at maturity?
c. Immediately after the CD is issued, the secondary market price on the $3 million CD falls to $2,899,000. Calculate the new secondary market quoted yield, the bond equivalent yield, and the EAR on the $2.9 million face value CD.

Calculate the bond equivalent yield and the EAR on the CD. (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))

How much will the negotiable CD holder receive at maturity? (Do not round intermediate calculations. Round your answer to nearest whole number. (e.g., 32))

Immediately after the CD is issued, the secondary market price on the $3 million CD falls to $2,899,000. Calculate the new secondary market quoted yield, the bond equivalent yield, and the EAR on the $2.9 million face value CD. (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 4 decimal places. (e.g., 32.1616))

Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market value ratios, relate to a firm’s observable market value, stock prices, and book values, integrating information from both the market and the firm’s financial statements.

Consider the case of Cute Camel Woodcraft Company:

Cute Camel Woodcraft Company just reported earnings after tax (also called net income) of $9,000,000 and a current stock price of $20.25 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2,500,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,000,000).

If Cute Camel’s forecast turns out to be correct and its price/earnings (P/E) ratio does not change, what does the company’s management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places.)

$17.41 per share

$20.25 per share

$13.06 per share

$21.76 per share

One year later, Cute Camel’s shares are trading at $49.60 per share, and the company reports the value of its total common equity as $27,856,000. Given this information, Cute Camel’s market-to-book (M/B) ratio is   .

Can a company’s shares exhibit a negative P/E ratio?

Yes

No

Which of the following statements is true about market value ratios?

Low P/E ratios could mean that the company has a great deal of uncertainty in its future earnings.

High P/E ratios could mean that the company has a great deal of uncertainty in its future earnings.

Of the four popular investment appraisal technique, recommend either one or two techniques that shall remain most useful when examining the current expectations of shareholders particularly when reviewing ROI impact surrounding capital investments? Is it really essential to consider economic factors and business conditions apart from following changes in social, environmental and political uncertainties, apart fromfactoring ‘time value of money’ considerations’, when estimating FV of ‘cash flows’, analyze ‘opportunity costs’ and the ‘eventual financial health of the organization’ to support a risk free judgement for backing capital investment decision-making?.

Let’s say if we are ignore these factors….would organizational leaders run the risk of bankruptcy or worse still a financial irreversible calamity?...

Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $3,200,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 2 years before she sells the house and pays the bank the balance, what is Ann’s annualized IRR from mortgage A

AFN equation

Broussard Skateboard's sales are expected to increase by 15% from $7.0 million in 2016 to $8.05 million in 2017. Its assets totaled $4 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 70%.

1. What would be the additional funds needed? Do not round intermediate calculations. Round your answer to the nearest dollar.
$

2. Assume that an otherwise identical firm had $5 million in total assets at the end of 2016. The identical firm's capital intensity ratio (A₀*/S₀) is

-Select- 1. higher than    2. lower than 3.equal to

than Broussard's; therefore,

3. the identical firm is

-Select- 1.less    2. more 3. the same capital intensive -

4. it would require

-Select- 1. a smaller    2. a larger 3. the same increase in total assets to support the increase in sales.

Can companies act ethically or is there a need for greater governance beyond internal committees. Or do we require a higher level form of governance. Can social application companies govern themselves or does this require the government to intervene?

Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of the machine will be $1,700,000, and its economic life is five years. The machine will be fully depreciated by the straight-line method. The machine will produce 27,000 keyboards each year. The price of each keyboard will be $59 in the first year and will increase by 4 percent per year. The production cost per keyboard will be $26 in the first year and will increase by 5 percent per year. The project will have an annual fixed cost of $285,000 and require an immediate investment of $250,000 in net working capital. The corporate tax rate for the company is 25 percent. The appropriate discount rate is 9 percent. What is the NPV of the investment?

Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given next:

a. What is the expected value of unit sales for the new product?

b. What is the standard deviation of unit sales?