Find the cost of debt

​(r​d),

and the​ after-tax cost of debt for each of the following​ bonds:

Bond​ A, Cost of Debt​ (rd) :

Bond A, After Tax Cost of​ Debt:

​

Bond​ B, Cost of Debt​ (rd):

Bond​ B, After Tax Cost of​ Debt:

​Bond​ C, Cost of Debt​ (rd):

Bond​ C, After Tax Cost of​ Debt:

​

Find a company that is an example of low cost leadership or low cost focus. Explain why this company is an example. Does this company or the conditions meet the criteria for being appropriate for low cost leadership or low cost focus? Explain why or why not. Has this company experienced any of the risks or drawbacks of using either low cost leadership or low cost focus? Explain. What has been the impact of this strategy on power? Explain this using the Five Forces Model. Explain the advantages and disadvantages that this company has experienced as a result of following this strategy. Through answering this question, demonstrate your comprehension of and ability to apply the concepts of Generic Strategies and the Five Forces Model.

A proposed cost-saving device has an installed cost of $790,000. 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 $77,000, the marginal tax rate is 21 percent, and the project discount rate is 10 percent. The device has an estimated Year 5 salvage value of $118,000. 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.)

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

Indirect labor would be included in factory overhead.

Depreciation expense on factory equipment is part of factory overhead cost.

Direct labor cost is an example of a period cost.

Custom-made goods would be accounted for using a process costing system.

In a process costing system, a separate work in process inventory account is maintained for each customer’s job.

A proposed cost-saving device has an installed cost of $664,000. The device will be used in a five-year project but is classified as three-year MACRS (MACRS Table) property for tax purposes. The required initial net working capital investment is $53,500, the marginal tax rate is 34 percent, and the project discount rate is 13 percent. The device has an estimated Year 5 salvage value of $78,500.

What is the depreciation each year of the project?

What is the aftertax salvage value of the equipment?

Aftertax salvage value $ What level of pretax cost savings do we require for this project to be profitable?

An injection molding system has a first cost of $160,000 and an annual operating cost of $81,000 in years 1 and 2, increasing by $5,500 per year thereafter. The salvage value of the system is 25% of the first cost regardless of when the system is retired within its maximum useful life of 5 years. Using a MARR of 8% per year, determine the ESL and the respective AW value of the system.

The ESL is year(5) and AW value of the system is $__________________ .

Incorrect answers 479,881.50,471,254.77 i have tried using a negative value with not luck

The executives of Garner-Wagner Inc. are considering a project that will cost $85 million. The cost of capital for this type of project is 10 percent and the risk-free rate is 5 percent. There is a 50 percent chance of high demand, with future cash flows of $50 million per year for 3 years. There is a 40 percent chance of average demand, with cash flows of $30 million per year for 3 years. If demand is low (a 10 percent chance), cash flows will be only $20 per year for 3 years

a. What is the expected NPV?

b. If Garner-Wagner Inc makes the investment today, then it will have the option to replicate the project at the end of project life if the demand is high. The cash flow will be repeated (i.e., the demand will continue to be high).

Use decision-tree analysis to calculate the expected NPV of this project, including the option to replicate.

c. If Garner-Wagner Inc wants to use Black-Sholes formula to estimate the value of this real option, What would be the value of P in the Blacksholes formula?

d. Estimate the variance in the Black-Sholes formula.

Machine X has a first cost of $70,000 and an operating cost of $21,000 in year 1, increasing by $500 per
year through year 5 with a salvage value of $13,000. Machine Y has a first cost of $62,000 and an operating cost of
$21,000 in year 1, increasing by 3% per year through year 10 with a salvage value of $2000. If the interest rate is
i 13% per year, evaluate which machine must you choose on the basis of:
(a) the present worth analysis,
(b) the conventional B/C analysis

With explanation of Pa , Pc, Ps PW for plan X

Pa ,Ps PW, for plan Y

Delta (C+O) , delta B , Delta B/C

A monopolist produces gizmos at constant marginal cost of 4 and no fixed cost. It recognizes that it has two types of customers. The demand curve of each type of customer is given by: Type-1 customer: ( ) p1 q1 = 18 − 2q1 Type-2 customer: ( ) p2 q2 =15 − q2 where qi (i = 1, 2) are the quantity demanded of type i consumer per period. While the monopolist knows the demand curves, it cannot identify the type of a given consumer. It is assumed that it has 10 customers in total per period, and five of them are of Type 1. a) The monopolist wishes to sell both types of consumers. Assuming it charges the same two-part tariff schedule to both types of consumers; derive the optimal two-part tariff schedule. What would be the resulting profit? b) Suppose that the monopolist engages in second-degree price discrimination. Derive the two-part tariff schedules that are incentive compatible for both types, and the resulting profit in this case