A company is considering whether to replace
one of its construction equipment.
• The existing equipment has a current cost of $15,000,
which declines by 20% each year for three years. The
operating cost for this equipment is $20,000 for year 1,
$8,000 for year 2, and $12,000 for year 3.
• The proposed equipment will cost $50,000, last five
years, and has a market value that declines by 20%
each year. The operating cost for the proposed
equipment is $5,000 in year 1, increasing by $2,000
each year after that.
Use ESL analysis, with i= 10%, to determine what
the company should do. Solve by hand.
In: Economics
.A machine cost $200,000 and has a salvage value of $100,000 if kept for one year. The salvage value will decrease by $50,000 in years 2 and 3 and remain zero after year 3. The operating costs are $50,000 the first year and increase by $50,000 per year. So operating costs in year two will be $100,000, and in year three $150,000 and so on. How long should the equipment be kept so that annual cost is minimized if the MARR is 10%/year compounded annually or stated another way what is the economic service life (ESL) and what is the associated annual cost for this service life?
In: Economics
1. Your company is analyzing the possible purchase of new equipment at a cost of $150,000. Assume straight-line depreciation and a 3-year depreciable life. It is estimated the equipment would save:$120,000 in Year 1$120,000 in Year 2$120,000 in Year 3$120,000 in Year 4Project operating costs are expected to be $40,000 each year. The firm’s income tax rate is 21 percent, and its required rate of return or cost of capital is 12 percent. Calculate the Net Present Value (NPV) of this project. Should your firm accept or reject the project? Year 4
In: Finance
Mr. Graziano Pellè, the capital budgeting director of Giovinco
Corporation(GC), is evaluating a five-year project, which will
require an initial investment of $98,000 today. The expected
end-of-year cash flows of the project are as follows: Year 1:
$40,000 Year 2: $29,000 Year 3: $30,000 Year 4: $10,000 Year 5:
$11,000 Weighted average cost of capital of this project is 13%,
and both target payback and discounted payback is 4 years.
a. What is the IRR of this project?
b. What is the NPV of this project?
c. What is discounted payback of this project?
d. What is the payback of this project?
In: Finance
Locate the balance sheet of a publicly-traded corporation online in its annual report (10-K) and answer the following questions:
What were the total current assets this year and last year for the company you chose?
What were the total current liabilities this year and last year for the company you chose?
Calculate the Current Ratio for this year and last year for the company you chose.
Analyze your company's current ratio (is it good/bad; how does it compare to the prior year, etc.) Include a link to the URL from which you located the company's annual report
In: Accounting
Dividends Per Share
Seacrest Company has 15,000 shares of cumulative preferred 2% stock, $50 par and 50,000 shares of $20 par common stock. The following amounts were distributed as dividends:
| Year 1 | $22,500 |
| Year 2 | 7,500 |
| Year 3 | 45,000 |
Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.
| Year 1 | Year 2 | Year 3 | |
| Preferred stock (Dividends per share) | $ | $ | $ |
| Common stock (Dividends per share) | $ | $ | $ |
In: Accounting
Dividends Per Share
Sandpiper Company has 30,000 shares of cumulative preferred 2% stock, $100 par and 50,000 shares of $15 par common stock. The following amounts were distributed as dividends:
| Year 1 | $90,000 |
| Year 2 | 30,000 |
| Year 3 | 180,000 |
Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.
| Year 1 | Year 2 | Year 3 | |
| Preferred stock (Dividends per share) | $ | $ | $ |
| Common stock (Dividends per share) | $ | $ | $ |
In: Accounting
| Settlement Date= | 5/12/2013 | |
| Maturity Date= | 5/12/2023 | |
| Coupon Rate= | 8.000% | |
| Current Market Price= | 94.00 | |
| Redemption value at Maturity %= | 100 | |
| Coupon Pmts per year= | 2 | |
| Call Provision | ||
| Year | Call Price | Dates |
| Year 1 = | 105 | 5/12/2014 |
| Year 2 = | 104 | 5/12/2015 |
| Year 3 = | 103 | 5/12/2016 |
| Year 4 = | 102 | 5/12/2017 |
| Year 5 = | 101 | 5/12/2018 |
| YTM = | ||
| YTC (3) = | ||
|
YTW = |
||
| Please use excel for this | ||
In: Finance
Dividends Per Share
Oceanic Company has 25,000 shares of cumulative preferred 3% stock, $150 par and 50,000 shares of $20 par common stock. The following amounts were distributed as dividends:
| Year 1 | $168,800 |
| Year 2 | 45,000 |
| Year 3 | 337,500 |
Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.
| Year 1 | Year 2 | Year 3 | |
| Preferred stock (Dividends per share) | $ | $ | $ |
| Common stock (Dividends per share) | $ | $ | $ |
In: Operations Management
Prepare journal entries to record the following transactions that occurred for this company in its second year of operations. • Year 2 sales on account: $5,700,000. • Year 2 collections of accounts receivable: $5,900,000. • Year 2 write-offs: $44,000 • Year 2 reinstatements and subsequent collections of reinstated accounts: $29,000 • 12/31/Y2: Year-end adjustment to record estimated uncollectible accounts at 4% of credit sales.
Directions: Prepare all journal entries, post to accounts, and show the year-end balance sheet presentation of accounts receivable. Calculate the NRV after each transaction listed above.
In: Accounting