. Consider a new line of equipment that will cost $1.7 million and will save a company $300,000 in operating expenses for the next ten years. The estimated salvage value in ten years is $250,000. The new equipment will not affect sales, but it will result in an increase in Net Working Capital of $230,000.

The new line will replace an old line of equipment that will last for four more years before it could be scrapped for $75,000. If sold today, the old equipment is worth $180,000. The old equipment was purchased five years ago for $1.1m and is being depreciated using the MACRS 7-year rates. The new equipment will also be depreciated using the 7-year rates. The company’s marginal tax rate is 30% and their cost of capital is 10%.

Calculate the NPV and IRR of this replacement project. What is the breakeven salvage value for the new machinery?   (20 pts.)

MACRS 7-year rates:

You are considering a project with an opportunity cost of 10% and that offers up the following two possible payouts based on your ability to market the product:

In the optimistic state you expect the following payouts, -$4,795, $8,000, $8,000. Based on your pessimistic expectations you expect the following -$4,795, -$500, -$10,000. The cash flows fall at time period 0, 1 and 2.

Your sense is that there is a 40% chance things will turn out well and a 60% chance things will turn out poorly. What is your expected NPV if you are able to abandon the project after year one?

The major issues of the health care system in the United States are the cost of health care, access to health care and quality of health care.

In a minimum of 250 words list and explain an example of each of the 3 major issues.

There is a large number of benefits for restaurants who regularly monitor the cost of their menu items. To do this, You have to invest in the right tools and encourage your staff to understand this process. What is your take on this subject? Do you know of any restaurants who do poorly in this area or others who base their success in this principle? If so, can you share what these restaurants or corporations are and the reason you believe that?

Mohr Company purchases a machine at the beginning of the year at a cost of $30,000. The machine is depreciated using the straight-line method. The machine’s useful life is estimated to be 8 years with a $4,000 salvage value. The book value of the machine at the end of year 2 is:

PLEASE HELP!!

1. An investment has a cost of $3500. The investment will have a payout of X at the end of the first year. This initial payout X will grow at the rate of 12% per year for the next 4 years, then by 7% per year for the next 4 years, and then at the rate of 3% per year for the following 3 years. You believe the riskiness of this investment is 9%.
   1. Calculate the smallest X that would entice you to invest.

There is a 0.9968 probability that a female lives through the year. The cost of one year premium is $226. If she dies within the year the policy pays %50,000 in death benefit.

A. State the two events representing possible outcomes

B. Calculate the female's expected gain

450 policies are sold in one year. Let x = # of policyholders who die within the year.

C. Calculate the company's total intake from premiums for one year.

D. If the company is to make a profit, state the possible value(s) of x.

E. Find the probability that company makes a profit.

*Please show work, thank you*

Individual or component costs of capital) Compute the cost of capital for the firm for the following:

• A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 10.8%. Interest payments are $54.00 and are paid semiannually. The bonds have a current market value of $1,130 and will mature in 15 years. The firm's marginal tax rate is 34%.
• A new common stock issue that paid a $1.77 dividend last year. The firm's dividends are expected to continue to grow at 8.4% per year, forever. The price of the firm's common stock is now $27.61.
• A preferred stock that sells for $141, pays a dividend of 8.5%, and has a $100 par value.
• A bond selling to yield 10.4% where the firm's tax rate is 34%

You are evaluating a project that will cost $ 522 ,000​, but is expected to produce cash flows of $ 121,000 per year for 10 ​years, with the first cash flow in one year. Your cost of capital is 11.1 % and your​ company's preferred payback period is three years or less.

a. What is the payback period of this​ project?

b. Should you take the project if you want to increase the value of the​ company?

You are evaluating a project that will cost $ 547 ,000​, but is expected to produce cash flows of $ 127,000 per year for 10 ​years, with the first cash flow in one year. Your cost of capital is 10.7 % and your​ company's preferred payback period is three years or less.

a. What is the payback period of this​ project?

b. Should you take the project if you want to increase the value of the​ company?

If you want to increase the value of the company you?(will not or will)

take the project since the NPV is? (negative or positive)