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In: Finance
The Brookfield Corporation is considering a four-year project with the following data; What is the project...
The Brookfield Corporation is considering a four-year project with the following data; What is the project NPV using wacc of 11.3%?
Additional investment in fixed assets but no additional working capital $100,000
Straight-line depreciation rate 25% but zero salvage value after four years
Annual sales revenues (constant for every year) $75,000
Operating costs (excl. depreciation) (also constant) $25,000
Tax rate 21.0%
Trumbull Inc. has $4.8 million EBIT, $1.2 million depreciation, a tax rate of .4, a capital expenditure of $0.7 million, and an increase in NOWC of $1.1 million. To the nearest 0.1 million, what is its free cash flow?
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jeff jeffy answered 2 years agoRelated Solutions
The Glenn Corporation is considering a four-year project with the following data; What is the project...
The Glenn Corporation is considering a four-year project with
the following data; What is the project NPV using wacc of 5.4%?
Additional investment in fixed assets but no additional working
capital $100,000
Straight-line depreciation rate 25% but zero salvage value after
four years
Annual sales revenues (constant for every year) $75,000
Operating costs (excl. depreciation) (also constant) $25,000
Tax rate 21.0%
old Corporation is considering a project. The data for the 3 year project are given below....
old Corporation is considering a project. The data for the 3
year project are given below. Should the manager of Gold
Corporation accept this project? Use the NPV criteria to make your
decision.
Sales revenue, each year: $50,000
Variable costs, each year: $12,000
Fixed costs, each year: $0
Sunk costs: $30,000
Initial outlay: $45,000
Depreciation, each year: $15,000
Tax rate: 20%
WACC: 12%
The project should not be accepted because it has an NPV of
-$15,179
The project should be...
Consider the following project of Hand Clapper, Inc. The company is considering a four-year project to...
Consider the following project of Hand Clapper, Inc. The company
is considering a four-year project to manufacture clap-command
garage door openers. This project requires an initial investment of
$12.8 million that will be depreciated straight-line to zero over
the project’s life. An initial investment in net working capital of
$560,000 is required to support spare parts inventory; this cost is
fully recoverable whenever the project ends. The company believes
it can generate $10.3 million in pretax revenues with $3.8 million...
Adamson Corporation is considering four average-risk projects with the following costs and rates of return: Project...
Adamson Corporation is considering four average-risk projects
with the following costs and rates of return:
Project
Cost
Expected Rate of Return
1
$2,000
16.00%
2
3,000
15.00
3
5,000
13.75
4
2,000
12.50
The company estimates that it can issue debt at a rate of
rd = 10%, and its tax rate is 25%. It can issue
preferred stock that pays a constant dividend of $5.00 per year at
$59.00 per share. Also, its common stock currently sells for $46.00...
Adamson Corporation is considering four average-risk projects with the following costs and rates of return: Project...
Adamson Corporation is considering four average-risk projects
with the following costs and rates of return: Project Cost Expected
Rate of Return 1 $2,000 16.00% 2 3,000 15.00 3 5,000 13.75 4 2,000
12.50 The company estimates that it can issue debt at a rate of rd
= 10%, and its tax rate is 40%. It can issue preferred stock that
pays a constant dividend of $5 per year at $45 per share. Also, its
common stock currently sells for $34...
Adamson Corporation is considering four average-risk projects with the following costs and rates of return: Project...
Adamson Corporation is considering four average-risk projects
with the following costs and rates of return:
Project
Cost
Expected Rate of Return
1
$2,000
16.00%
2
3,000
15.00
3
5,000
13.75
4
2,000
12.50
The company estimates that it can issue debt at a rate of
rd = 10%, and its tax rate is 40%. It can issue
preferred stock that pays a constant dividend of $6 per year at $42
per share. Also, its common stock currently sells for $38...
Dr. Chan is considering a four year project. The project requires an initial investment of $10,000,000...
Dr. Chan is considering a four year project. The project
requires an initial investment of $10,000,000 to buy new equipment.
The equipment will be depreciated straight line to zero over the
project’s life. The company believes it can generate $5,000,000 in
pretax revenues in year 1. Revenues will increase at 20% per year.
Total pretax operating cost would be 40% of the pretax revenues.
Net working capital will be 20% of the pretax revenue for the year.
Net working capital...
Domino Corporation is considering a 3-year project with an initial cost of $470,000. The project will...
Domino Corporation is considering a 3-year project with an
initial cost of $470,000. The project will not directly produce any
sales but will reduce operating costs by $143,000 a year. The
equipment is classified as MACRS 7-year property. The MACRS table
values are .1429, .2449, .1749, .1249, .0893, .0892, .0893, and
.0446 for Years 1 to 8, respectively. At the end of the project,
the equipment will be sold for an estimated $223,000. The tax rate
is 25 percent and...
You are considering a project that has the following cash flow and WACC data. What is...
You are considering a project that has the following cash flow
and WACC data. What is the project’s NPV?
WACC:
9.00%
Year:
0
1
2
3
4
5
Cash flows:
–$1,000
$300
$300
$300
$300
$300
Select one:
a. 150.62
b. 176.4
c. 166.90
d. 143.90
Redesign Inc. is considering a project that has the following cash flow data. (a) What is...
Redesign Inc. is considering a project that has the following
cash flow data. (a) What is the project's payback period? (b) What
is the project's discounted payback period? Assume the cost of
capital is 12%. Year 0 1 2 3 Cash flows -$500 $200 $200 $200
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