At a local manufacturing plant, employees must complete new machine set ups within 40 minutes. New machine set-up times can be described by a normal model with a mean of 27 minutes and a standard deviation of 5 minutes. a. What percent of new machine set ups take more than 35 minutes? b. The typical worker needs ten minutes to adjust to their surroundings before beginning their duties. What percent of new machine set ups are completed within 30 minutes to allow for this?

New-Project Analysis

Madison Manufacturing is considering a new machine that costs $350,000 and would reduce pre-tax manufacturing costs by $110,000 annually. Madison would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of $33,000 at the end of its 5-year operating life. The applicable depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%. Working capital would increase by $35,000 initially, but it would be recovered at the end of the project's 5-year life. Madison's marginal tax rate is 40%, and a 9% cost of capital is appropriate for the project.

1. Calculate the project's NPV, IRR, MIRR, and payback. Do not round intermediate calculations. Round the monetary value to the nearest dollar and percentage values and payback to two decimal places. Negative values, if any, should be indicated by a minus sign.

   NPV: $  

   IRR:   %

   MIRR:   %

   The project's payback:  years

2. Assume management is unsure about the $110,000 cost savings - this figure could deviate by as much as plus or minus 20%. Do not round intermediate calculations. Round your answer to the nearest dollar. Negative values, if any, should be indicated by a minus sign.

   Calculate the NPV if cost savings value deviate by plus 20%.

   $  

   Calculate the NPV if cost savings value deviate by minus 20%.

   $  

3. Suppose the CFO wants you to do a scenario analysis with different values for the cost savings, the machine's salvage value, and the working capital (WC) requirement. She asks you to use the following probabilities and values in the scenario analysis:

   Scenario	Probability	Cost Savings	Salvage Value	WC
   Worst case	0.30	$  88,000	$28,000	$40,000
   Base case	0.40	110,000	33,000	35,000
   Best case	0.30	132,000	38,000	30,000

   Calculate the project's expected NPV, its standard deviation, and its coefficient of variation. Do not round intermediate calculations. Round the monetary values to the nearest dollar and a coefficient of variation to two decimal places. Negative values, if any, should be indicated by a minus sign.

   The project's expected NPV: $  

   Standard deviation: $  

   Coefficient of variation:

Problem 18-01
Profit or Loss on New Stock Issue

Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent offering of Beedles Inc., the terms were as follows:

The out-of-pocket expenses incurred by Security Brokers in the design and distribution of the issue were $370,000. What profit or loss would Security Brokers incur if the issue were sold to the public at the following average price?

1. $5.5 per share? Use minus sign to enter loss, if any.
   $
   
2. $5.75 per share? Use minus sign to enter loss, if any.
   $
   
3. $3.75 per share? Use minus sign to enter loss, if any.
   $

.

NEED NEW ANSWER ASAP / ANSWER NEVER USED BEFORE, COMPLETELY NEW ANSWER PLEASE

Your employer, a midsized human resources management company, is considering expansion into related fields, including the acquisition of Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. Your employer is also considering the purchase of Biggerstaff & McDonald (B&M), a privately held company owned by two friends, each with 5 million shares of stock. B&M currently has free cash flow of $24 million, which is expected to grow at a constant rate of 5%. B&M’s financial state-ments report short-term investments of $100 million, debt of $200 million, and preferred stock of $50 million. B&M’s weighted average cost of capital (WACC) is 11%.

Answer the following questions:

a. Describe briefly the legal rights and privileges of common stockholders.

b. What is free cash flow (FCF)? What is the weighted average cost of capital? What is the free cash flow valuation model?

c. Use a pie chart to illustrate the sources that comprise a hypothetical company’s total value. Using another pie chart, show the claims on a company’s value. How is equity a residual claim?

d. Suppose the free cash flow at Time 1 is expected to grow at a constant rate of gL forever. If gL cash flows when discounted at the WACC? If the most recent free cash flow is expected to grow at a constant rate of gL , WACC), what is a formula for the present value of expected free cash flows when discounted at the WACC?

e. Use B&M’s data and the free cash flow valuation model to answer the following questions:

(1) What is its estimated value of operations?

(2) What is its estimated total corporate value? (This is the entity value.)

(3) What is its estimated intrinsic value of equity?

(4) What is its estimated intrinsic stock price per share?

ANSWER THROUGHLY 1-2 pages *** IN PARAGRAPGH FORM PLEASE NOT BULLET POINTS

COPY AND PASTE Answer in paragraphs, and no picture attachment please.

NEEDS TO BE AN ORIGINAL SOURCE ANSWER NEVER USED BEFORE

***NEEDS TO BE AN ORIGINAL SOURCE PLEASE***

PLEASE ANSWER THROUGHLY ALL ANSWERS

Answer to best abilities please.

New-Project Analysis

Madison Manufacturing is considering a new machine that costs $350,000 and would reduce pre-tax manufacturing costs by $110,000 annually. Madison would use the 3-year MACRS method to depreciate the machine, and management thinks the machine would have a value of $33,000 at the end of its 5-year operating life. The applicable depreciation rates are 33.33%, 44.45%, 14.81%, and 7.42%. Working capital would increase by $35,000 initially, but it would be recovered at the end of the project's 5-year life. Madison's marginal tax rate is 40%, and a 10% WACC is appropriate for the project. Enter negative answers with minus sign

a. Assume management is unsure about the $110,000 cost savings - this figure could deviate by plus 20%. Calculate the NPV over the five-year period. Round your answer to the nearest dollar.

b.Suppose the CFO wants you to do a scenario analysis with different values for the cost savings, the machine's salvage value, and the working capital (WC) requirement. She asks you to use the following probabilities and values in the scenario analysis:

Calculate the project's expected NPV. Round your answer to the nearest dollar.

Calculate the project's standard deviation. Round your answer to the nearest dollar.

Calculate the project's coefficient of variation. Round your answer to two decimal places.

Cali Inc. wants to issue new 10-year bonds to fund its new investments. The company currently has 5 percent coupon bonds on the market that sell for $1,060. These bonds make semi-annual payments, and mature in 10 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?What is the yield to maturityon the bonds?

BenT Shoes will open several new production facilities during the coming year. Each new production facility is designed to have one quality inspector. A concern is that during busy periods, the shipment of shoes to retailers may be delayed as they wait to be inspected. This concern prompted BenT Shoes to undertake a study of the flow of shoes into the quality inspection department as a waiting line. BenT Shoes vice president wants to determine whether one quality inspector per facility will be sufficient. The average delay waiting for quality inspection should be no more than one minute.

One random variable is the arrival times of shoes to the quality inspection department. For the quality inspection department being studied, the shoes interarrival times are assumed to be uniformly distributed between 2 and 9 minutes. Like the examples of your text-book, assume that the simulation run begins at time=0. Past data from similar quality inspection departments indicate that a normal probability distribution with a mean of 3 minutes and a standard deviation of 0.5 minutes can be used to describe service (inspection) times. Build the suitable simulation model, run it for 10 times, and decide if one inspector is enough.

Problem 11-01
Investment Outlay

Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $18 million, and production and sales will require an initial $2 million investment in net operating working capital. The company's tax rate is 40%.

1. What is the initial investment outlay? Write out your answer completely. For example, 2 million should be entered as 2,000,000.
   $?
   
2. The company spent and expensed $150,000 on research related to the new project last year. Would this change your answer?
   -Select-Yes or No
   
3. Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. How would this affect your answer?
   The project's cost will -Select- increase decrease or not change.

Your new client, Pool Chem, Inc., is looking to purchase new accounting software. Your client asks for your advice on the advantages and disadvantages of purchasing an "off the shelf" program vs. an internally developed program. Prepare a response to your client.