A firm is considering an investment in a new machine with a price of $17.2 million to replace its existing machine. The current machine has a book value of $6.8 million and a market value of $5.5 million. The new machine is expected to have a 4-year life, and the old machine has four years left in which it can be used. If the firm replaces the old machine with the new machine, it expects to save $7.0 million in operating costs each year over the next four years. Both machines will have no salvage value in four years. If the firm purchases the new machine, it will also need an investment of $390,000 in net working capital. The required return on the investment is 10 percent and the tax rate is 24 percent. The company uses straight-line depreciation. What is the NPV of the decision to purchase a new machine? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to 2 decimal places, e.g., 1,234,567.89.) What is the IRR of the decision to purchase a new machine? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What is the NPV of the decision to purchase the old machine? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to 2 decimal places, e.g., 1,234,567.89.) What is the IRR of the decision to purchase the old machine? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. )

Select two public companies in the same industry, obtain their most recent published financial statements, and perform financial ratio analysis for both. Write a report to summarize your findings and conclusion. Your report should include:

1. Balance sheet ratio analysis
2. Income statement ratio analysis
3. Statement of cash flow ratio analysis
4. Credit rating of both companies by Standard & Poor’s and Moody’s
5. Ratio comparative analysis
6. Clear conclusion and opinion about which company you prefer to invest in, and why.

What are the knowledge important for hotel business (Customer, supplier, administrator)(Small hotels like darwin city hotel)? How they use these knowledge? Develop a KMS framework for the business

Simone runs a small business and receives an invoice for $1000 payable in 30 days. The invoice offers a discount of 2% for immediate payment. If Simone doesn’t pay immediately and instead pays in 30 days, what effective annual interest rate is she paying?

Georgia Office Supplies recently reported $12,500 of sales, $7,250 of operating costs other than depreciation, and $1,250 of depreciation. The company had no amortization charges and no non-operating income. It had $8,000 of bonds outstanding that carry a 7.5% interest rate, and its federal-plus-state income tax rate was 40%. The firm had 1,000 shares outstanding.

1) How much was the firm's taxable income, or earnings before taxes (EBT)?

EBT = $12,500 - $7,250 - $1,250 - (.075 x $8,000) = $3,400

2) What is the firm’s earnings per share (EPS), assuming a Dividend of $100?

The expected pretax return on three stocks is divided between dividends and capital gains in the following way:

a. If each stock is priced at $195, what are the expected net percentage returns on each stock to (i) a pension fund that does not pay taxes, (ii) a corporation paying tax at 45% (the effective tax rate on dividends received by corporations is 10.5%), and (iii) an individual with an effective tax rate of 10% on dividends and 5% on capital gains? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

b. Suppose that investors pay 40% tax on dividends and 10% tax on capital gains. If stocks are priced to yield an after-tax return of 10%, what would A, B, and C each sell for? Assume the expected dividend is a level perpetuity. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Stock Price
A
B
C

A proposed cost-saving device has an installed cost of $655,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $65,000, the marginal tax rate is 22 percent, and the project discount rate is 11 percent. The device has an estimated Year 5 salvage value of $56,000. What level of pretax cost savings do we require for this project to be profitable? MACRS schedule. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

You are given the following information: Stock Expected return (in %) σ (in %) A 10 10 B 5 5 The covariance between these returns is 16%2 . The risk-free rate is 6%. (a) Find the expected return and standard deviation of the following portfolios: i. 50% in A, 50% in B ii. 50% in A, 50% in the risk-free asset iii. 150% in A, financed by borrowing at the risk-free rate

Lemon Auto Wholesalers had sales of $1,570,000 last year, and cost of goods sold represented 70 percent of sales. Selling and administrative expenses were 12 percent of sales. Depreciation expense was $14,000 and interest expense for the year was $15,000. The firm’s tax rate is 30 percent. a. Compute earnings after taxes. b-1. Assume the firm hires Ms. Carr, an efficiency expert, as a consultant. She suggests that by increasing selling and administrative expenses to 14 percent of sales, sales can be increased to $1,620,600. The extra sales effort will also reduce cost of goods sold to 66 percent of sales. (There will be a larger markup in prices as a result of more aggressive selling.) Depreciation expense will remain at $14,000. However, more automobiles will have to be carried in inventory to satisfy customers, and interest expense will go up to $22,600. The firm’s tax rate will remain at 30 percent. Compute revised earnings after taxes based on Ms. Carr’s suggestions for Lemon Auto Wholesalers. (Round taxes and earnings after taxes to 1 decimal place.) b-2. Will her ideas increase or decrease profitability? Increase profitability Decrease profitability

You are the financial manager of a firm manufacturing headphones. You just announced that this year’s profits are $2 million. Analysts predict your profits will grow at 5% each year for the next three years and then profit growth will slow to 3%per year and will continue growing at 3%in perpetuity. Assuming an opportunity cost of capital of 5%per year, what is the present value of your future (not counting this year) projected profits? what is the present of your future projected earning including this year’s profits?

A Restaurant is open only for 25 days in a month.

Expenses for the restaurant include raw material for each sandwich at $5.00 per slice, $1,209.00 as monthly rental and $210.00 monthly as insurance. They consider the cost of lost sales as $6.00 per item. They are able to sell any leftover sandwiches for $3. They prepares 200.00 sandwiches and sells them at a rate of $13.00/sandwich.
Today there was a party at nearby office so the demand for sandwiches rose to 227.00. How much profit did the restaurant earn today?