Question
In: Finance
USE THIS INFORMATION FOR PROBLEMS. A firm has a project and the purchase price is 87K...
USE THIS INFORMATION FOR PROBLEMS. A firm has a project and the purchase price is 87K with 3K freight and installation and 7K in spare parts and inventory. Use a 5 year straight line depreciation and a 20 % tax bracket. Revenues are 150K each year for 3 years and Costs are 85K per year for the 3 years. The firm sells the business for 55K after only 3 years .
5. Find the INITIAL INVESTMENT (I.I.) and the NOCF = Net Operating Cash Flow For years 1 , 2 and 3
5A. Find the TCF Terminal Cash Flow for year 3
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A firm is considering a project with the following information: Project will require purchase of a...
A firm is considering a project with the following
information:
Project will require purchase of a machine for $92,101.00 that
is MACRS depreciable over a five-year schedule. (no depreciation
until end of year 1).
Project will require immediate non-depreciable expenses of
$25,021.00 TODAY (year 0).
Project will have the following projected balance sheet values
of NWC:
YEAR
0
1
2
NWC Level
$4,000
9.00% of sales
8.00% of sales
Sales for the project will be $54,556.00 per year, with all...
Please use the following information to answer the remaining problems: Able Corporation has a project with...
Please use the following information to answer the remaining
problems: Able Corporation has a project with the following cash
flows and an 9.6% cost of money: Numbers in parentheses are
outflows. Both Year 0 and Year 3 cash flows are outflows. Year 0 1
2 3 4 5 6 Cash flow $(351,000) $ 95,000 $186,000 $(300,000) $
280,000 $260,000 $268,000 23. Please calculate the net present
value ______________ 24. Please calculate the profitability indexes
(two decimals please)_________________ 25. Please calculate...
A firm is deciding on a new project. Use the following information for the project evaluation...
A firm is deciding on a new project.
Use the following information for the project evaluation and
analysis:
- The initial costs are
$900,000 for fixed assets. The fixed assets will be depreciated
straight line to a zero book value over the 3-year
life of the project. The fixed assets have an estimated salvage
value of $60,000 at the end of the project.
- The project also
requires an additional $200,000 for net working capital. All of the...
A firm is deciding on a new project. Use the following information for the project evaluation...
A firm is deciding on a new project.
Use the following information for the project evaluation and
analysis:
- The initial costs are
$900,000 for fixed assets. The fixed assets will be depreciated
straight line to a zero book value over the 3-year
life of the project. The fixed assets have an estimated salvage
value of $60,000 at the end of the project.
- The project also
requires an additional $200,000 for net working capital. All of the...
A firm is deciding on a new project. Use the following information for the project evaluation...
A firm is deciding on a new project.
Use the following information for the project evaluation and
analysis:
- The initial costs are
$900,000 for fixed assets. The fixed assets will be depreciated
straight line to a zero book value over the 3-year
life of the project. The fixed assets have an estimated salvage
value of $60,000 at the end of the project.
- The project also
requires an additional $200,000 for net working capital. All of the...
23. A firm is deciding on a new project. Use the following information for the project...
23. A firm is deciding
on a new project. Use the following information for the project
evaluation and analysis:
- The initial costs are
$900,000 for fixed assets. The fixed assets will be depreciated
straight line to a zero book value over the 3-year
life of the project. The fixed assets have an estimated salvage
value of $60,000 at the end of the project.
- The project also
requires an additional $200,000 for net working capital. All of...
6. A firm is deciding on a new project. Use the following information for the project...
6. A firm is deciding on a new project. Use the following
information for the project evaluation and analysis: - The initial
costs are $450,000 for fixed assets. The fixed assets will be
depreciated straight line to a zero book value over the 3-year life
of the project. The fixed assets have an estimated salvage value of
$30,000 at the end of the project. - The project also requires an
additional $100,000 for net working capital to start the project....
A firm is deciding on a new project. Use the following information for the project evaluation...
A firm is deciding on a new project. Use the following
information for the project evaluation and analysis: - The initial
costs are $900,000 for fixed assets. The fixed assets will be
depreciated straight line to a zero book value over the 3-year life
of the project. The fixed assets have an estimated salvage value of
$60,000 at the end of the project. - The project also requires an
additional $200,000 for net working capital. All of the net working...
Use the following information to work Problems 4 and 5. In China, the price of imported...
Use the following information to work Problems 4 and 5. In
China, the price of imported natural gas that is heavily used in
local production fluctuates frequently. This causes China’s
short-run macroeconomic equilibrium to fluctuate. Someone suggested
that the government raise transfer payments when the price of
natural gas rises in a way that counters the decrease in the
macroeconomic equilibrium.
4. How would such an action influence aggregate demand?
5. How would such an action influence aggregate supply and...
USE THE INFORMATION BELOW FOR PROBLEMS 1-4 An analyst wishes to estimate the share price for...
USE THE INFORMATION BELOW FOR PROBLEMS 1-4
An analyst wishes to estimate the share price for Ashley
Corporation. The following information
is made available:
Estimated profit margin = 15%
Total asset turnover = 2
Financial leverage = 1.2
Estimated dividend payout ratio = 75%
Required rate of return = 14%
Estimated EPS = $2.50
1. Calculate the firm's ROE.
2. Calculate the firm's sustainable growth rate.
3. Calculate the firm’s P/E multiple.
4. Calculate the firm’s estimated share price.
USE...
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