Symon Meats is looking at a new sausage system with an installed cost of $510,000. This cost will be depreciated straight-line to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $76,000. The sausage system will save the firm $190,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 34 percent and the discount rate is 10 percent, what is the NPV of this project?

1. Who pays the transaction cost (the fee to the bank and network for the use of the card) of a debit card purchase?

A.The Government B. Mastercard C.The Bank D.Vendor (The store where the transaction takes place)

2. Given the same nominal rate, what compounding term will give you the highest effective rate (APY)

A.Monthly B. Annually C.Quarterly D.Daily

3.When you want to compare the best option for the total cost of your loan, you should always ask for

A,Nominal Rate B. APR C. Variable Interest Rate D. Fixed Interest Rate

Deep Sea Drilling is evaluating drilling for oil in the Gulf of Mexico. It will cost $830 million to buy an oil rig. Drilling would start immediately. The company has a cost of capital of 8%.

There is a 50% probability that the new well will be succcessful, in which case the free cash flow from the well will be $200 million per year for 20 years. Otherwise, it will only generate $40 milion per year for 10 years.

PART 1: What is the NPV of the project (in $ million)?

PART 2:In fact, the company can abandon the project after the first year and sell the oil rig for $664 million. What is the NPV of the project now (in $ million)?

PART 3:What is the value of the option (in $ million)?

Cost of Units Completed and in Process

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

Cost per equivalent units of $1.30 for Direct Materials and $2.60 for Conversion Costs.

a. Based on the above data, determine the different costs listed below.

If required, round your interim calculations to two decimal places.

b. Did the production costs change from the preceding period?

c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?

Should firms reassess their cost of capital as they assess potential projects or acquisitions?

Has the cost of software increased or decreased? Explain the reasons for this. Describe the software that you consider essential for your daily life.

In the Capsim simulation, list the advantages and disadvantages of the Broad Cost Leader strategy.

Which of the following is NOT one of the four fundamental factors which effect the cost of money?

Group of answer choices

a.Sunk Costs

b.Production Opportunities

c.Time Preferences for Consumption

d.Risk

Company A is opening a new branch in Charlotte today. Their unlevered cost of equity is 14%, and their cost of debt is 5%. Their debt to equity ratio is 1.1, and their tax rate is 26%. Initial costs are $1.5M. The firm expects EBIT of $1M one year from today, $500,000 two years from today, and $200,000 three years from today, after which they expect to shut down. They will finance some of their startup costs by borrowing $400,000 at their cost of debt, to be repaid three years from today.

What is Eyesore’s levered cost of equity?

What is the NPV of this project using the FTE method?

Using the information in the following table and assuming that the cost of transferring units between 2 adjacent departments is $5/unit and between 2 non-adjacent departments is $8/unit,

1. Calculate the cost for the existing layout.     
2. Design a layout that will have a lower cost and calculate the cost.

Existing Layout