Question
In: Finance
The introduction of a new product at Elia Pharmaceuticals will require a $450,000 increase in inventory,...
The introduction of a new product at Elia Pharmaceuticals will require a $450,000 increase in inventory, a $730,000 increase in Accounts Receivable, and a $180,000 increase in Accounts Payable. Introduction of the product will also require a $700,000 expenditure for advertising. The increase in net working capital required for the introduction of this product is
A. $1,000,000. B. $1,700,000. C. $1,360,000. D. $1,180,000.
chose one option and please answer asap I am in middle of exam.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
You company is considering launching a new product that will increase inventory by $50,000 and increase...
You company is considering launching a new product that will
increase inventory by $50,000 and increase accounts receivables by
$23,000. What is the effect of these change in net working capital
(NWC) on cash flow at the beginning of the project?
Cash inflow of $73,000
Cash outflow of $73,000
Cash inflow of $27,000
Cash outflow of $27,000
WACC. Grey's Pharmaceuticals has a new project that will require funding of $1.3 million. The company...
WACC. Grey's Pharmaceuticals has a new project that will require
funding of $1.3 million. The company has decided to pursue an
all-debt scenario. Grey's has made agreements with four lenders for
the needed financing. These lenders will advance the following
amounts at the interest rates shown: Lender Amount Interest Rate
Steven $471,035- 16% Yang $394,713 -13% Shepherd $310,768 -11%
Bailey $123,484 -12%
What is the weighted average cost of capital for the
$1,300,000?
WACC. Grey's Pharmaceuticals has a new project that will require funding of $5.4 million. The company...
WACC. Grey's Pharmaceuticals has a new project that will
require funding of $5.4 million. The company has decided to pursue
an all-debt scenario. Grey's has made agreements with four
lenders for the needed financing. These lenders will advance the
following amounts at the interest rates shown: Lender Amount
Interest Rate Steven $2,029,278 12% , Yang $1,597,982 11% ,
Shepherd $1,192,408 8% , Bailey $580,332 9% . What is the weighted
average cost of capital for the $5,400,000?
Rent-to-Own Equipment Co. is considering a new inventory system that will cost $450,000. The system is...
Rent-to-Own Equipment Co. is considering a new inventory system
that will cost $450,000. The system is expected to generate
positive cash flows over the next four years in the amounts of
$250,000 in year one, $125,000 in year two, $110,000 in year three,
and $80,000 in year four. Rent-to-Own's required rate of return is
10%. What is the internal rate of return of this project?
a. 10.07% b. 11.89% c. 12.26% d. 12.69%
A new computer system will require an initial outlay of $20,000, but it will increase the...
A new computer system will require an initial outlay of $20,000,
but it will increase the firm’s cash flows by $4,300 a year for
each of the next 8 years.
a. Calculate the NPV and decide if the system is worth
installing if the required rate of return is 9%. (Negative amount
should be indicated by a minus sign. Do not round intermediate
calculations. Round your answers to 2 decimal places.)
b. Calculate the NPV and decide if the system...
A new computer system will require an initial outlay of $24,500, but it will increase the...
A new computer system will require an initial outlay
of $24,500, but it will increase the firm's cash flows by $4,900 a
year for each of the next 8 years. Calculate the NPV and decide if
the system is worth installing if the required rate of return is
9%. Calculate the NPV and decide if the system is worth installing
if the required rate of return is 14%. How high can the discount
rate be before you would reject the...
A new computer system will require an initial outlay of $17,500, but it will increase the...
A new computer system will require an initial outlay of $17,500,
but it will increase the firm’s cash flows by $3,500 a year for
each of the next 8 years. a. Calculate the NPV and decide if the
system is worth installing if the required rate of return is 9%.
(Negative amount should be indicated by a minus sign. Do not round
intermediate calculations. Round your answers to 2 decimal places.)
b. Calculate the NPV and decide if the system...
A new computer system will require an initial outlay of $24,000, but it will increase the...
A new computer system will require an initial outlay of $24,000,
but it will increase the firm’s cash flows by $4,800 a year for
each of the next 6 years. a. Calculate the NPV and decide if the
system is worth installing if the required rate of return is 8%.
What if it is 13%? (Negative amounts should be indicated by a minus
sign. Do not round intermediate calculations. Round your answers to
2 decimal places.)
Rate of Return NPV...
A new computer system will require an initial outlay of $21,500, but it will increase the...
A new computer system will require an initial outlay of $21,500,
but it will increase the firm’s cash flows by $4,600 a year for
each of the next 8 years.
a. Calculate the NPV and decide if the system
is worth installing if the required rate of return is 9%.
(Negative amount should be indicated by a minus sign. Do
not round intermediate calculations. Round your answers to 2
decimal places.)
b. Calculate the NPV and decide if the system...
A new computer system will require an initial outlay of $20,250, but it will increase the...
A new computer system will require an initial outlay of $20,250,
but it will increase the firm’s cash flows by $4,500 a year for
each of the next 6 years.
A) Calculate the NPV and decide if the system is worth
installing if the required rate of return is 8%. (Negative amount
should be indicated by a minus sign. Do not round intermediate
calculations. Round your answers to 2 decimal places.)
B) Calculate the NPV and decide if the system...
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