New attempt is in progress. Some of the new entries may impact the last attempt grading. Your answer is partially correct.

The cost of equipment purchased by Indigo, Inc., on June 1, 2017, is $ 101,460. It is estimated that the machine will have a $ 5,700 salvage value at the end of its service life. Its service life is estimated at  7 years, its total working hours are estimated at  47,880, and its total production is estimated at  598,500 units. During 2017, the machine was operated  6,840 hours and produced  62,700 units. During 2018, the machine was operated  6,270 hours and produced  54,720 units.

Compute depreciation expense on the machine for the year ending December 31, 2017, and the year ending December 31, 2018, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.

Listed below are two new researches by the IBM company .

A radical new recycling process

The biggest threat to our planet are humans, due to our waste and pollution. Plastic is one major issue, as it pollutes our planet on a daily basis and the predictions are that in 2050, there will be more plastic in our oceans than fishes. In order to prevent that from happening, IBM Researchers have invented the VolCat, which will make the recycling of plastic more efficient. This new recycling concept will break down all kinds of plastic, regardless if it is colored or not, clean or dirty. Hence, households won’t have to separate and recycle their plastic at home anymore, since the VolCat will use all types of plastic together. VolCat is a catalytic chemical process, which dissolves polyester plastics. Once it is digested, it can then be reused for new plastic manufacturing machines (IBM Research, n.d.).

Heavy Metal Free Batteries:

IBM is currently working on new battery technologies that are free of heavy metals such as cobalt, nickel, lithium, and other metal types. The main objectives of this project are to lower the cost of batteries, charge faster, higher power density, higher energy density, better efficiency, and lower flammability of batteries currently being used. They expect these batteries to be used in electronics, airplanes, cars, and any other product that requires mobile power. They are currently working with Mercedes-Benz Research and Development, Central Glass and battery manufacturers to develop this technology (Na, 2019).

In your own word discuss how both research can be beneficial to the future ? give a thorough explanation

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Nash Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2020. Jim Alcide, controller for Nash, has gathered the following data concerning inventory.

At May 31, 2020, the balance in Nash’s Raw Materials Inventory account was $436,560, and Allowance to Reduce Inventory to Market had a credit balance of $29,710. Alcide summarized the relevant inventory cost and market data at May 31, 2020, in the schedule below.

Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Nash’s May 31, 2020, financial statements for inventory at lower-of-cost-or-market as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Assume Garcia uses LIFO inventory costing.

(a1) Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2020.

(a2) For the fiscal year ended May 31, 2020, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory to Market.

3. A new machine will cost $600,000 including delivery and installation. The new unit has a CCA depreciation

rate of 25 percent. At the end of four years, it will be sold for $100,000. The net working capital requirement

required at the beginning of the rst four years are $50,000, $60,000, $70,000, and $60,000.

In the rst year, revenue will increase by $150,000 and operating costs will decrease by $30,000. The dierence

between them, R?C, will grow at 3 percent. The tax rate is 30 percent, and the discount rate is 14 percent.

(a) How will R ? C in the next four years aect the project's NPV?

(b) How will the PVCCATS and the proceeds from the sale at the end of year 4 aect the project's NPV?

(c) How will net working capital in the next four years aect the project's NPV?

(d) What is the free cash ow in year 1?

(e) What is the NPV of the project?

Holly is considering a new project. The project will require $500,000 for new fixed assets, $208,000 for additional inventory, and $36,000 for additional accounts receivable. Short-term debt is expected to increase by $165,000. The project has a 6-year life. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. At the end of the project, the fixed assets can be sold for 20 percent of their original cost. The net working capital returns to its original level at the end of the project. The project is expected to generate annual sales of $875,000 and costs of $640,000. The tax rate is 34 percent and the required rate of return is 12 percent. What is the net present value of this project? "

please show all work

A firm is considers introducing a new production line for its new product the Squeaky Clean. The production start-up costs are estimated to be £30,000 while the cash revenues are estimated at £20,000 per year. Cash costs (including taxes) will be £14,000 per year. Production will be wound down in eight years’ time and the salvage value at this time will be £2,000. The discount rate on similar projects is 15%. The objective of the firm is to maximize shareholder wealth.

Required (a) Use the Net Present Value (NPV) method to evaluate whether the investment should take place.

(b) If there are 1,000 shares of stock outstanding, what will be the effect on the price per share of taking this investment? (3 amrks)

A bank has recently acquired a new branch and thus has customers in this new territory. They are interested in the default rate in their new territory. They wish to test the hypothesis that the default rate is different from their current customer base. They sample 81 files in area A, their current customers, and find that 48 have defaulted. In area B, the new customers, another sample of 103 files shows 72 have defaulted on their loans. What is the Test Statistics to test the Null Hypothesis H0 : pA = pB against the alternative Ha : pA ≠ pB?

A firm producing computers considers a new investment which is about opening a new plant.

The project’s lifetime is estimated as 5 years and requires 22 million $ as investment cost. Salvage value of the project is estimated as 4 million $ (which will be received in the sixth year) However the firm prefers to show salvage value only as 2 million $. The firm uses 5-year straight-line depreciation.

It is estimated that the sales will be 12 million $ next year and then sales will grow by 20% each year.

It is estimated that fixed costs will be 1.5 million next year and then will grow by 5% each year.

Variable costs are projected %10 of sales each year.

This project, in addition, requires a working capital of $ 3 million in the first year, 4 million in the second year, 4 million in the third year, 3 million in the fourth year and 1.5 million in the fifth year.

Firm plans to use a debt/equity ratio of %50 in this project.

The company can borrow $ loan with an interest cost of 14% before tax. Corporate tax rate is 20%. The shares of this company in NYSE are selling at 8 $ and the stocks have approximately market risk and have a strong correlation with NYSE index. 10- year government bond yields at %12 and market risk premium is %8.

Given this information; find the NPV and IRR of the project; is this project feasible or not?

What is the result of higher WACC ? Can a company reduce its WACC ? If yes, how? Give numerical example related with this project and explain this topic briefly regarding to the capital structure theories.

Please solve this CLEARLY

Andrew Jim Moore. UC Berkeley.