During 2017, the management of Brogan plc identified a project that that will enable a new product to be sold and you have been asked to evaluate the new investment.
New plant and equipment will be purchased by the end of 2017 and this will cost £450 000. The new plant and equipment will be depreciated for tax purposes, using the straight-line method over a period of three years, which is the expected life of the machine. After three years, it is expected that the machine will have no scrap value.
As a result of this new product being manufactured and sold, the company’s working capital will increase by £20 000 at the end of 2017 and will increase to £35 000 in 2018 and remain at this level until the production ceases.
The new product will sell for £40 per unit and the variable cost is expected to be 25 per cent of the selling price. The fixed costs, excluding the depreciation charge will be £60 000 and this will increase by 10 per cent each year.
The sales of the new product are expected to be
2018 12 000 units
2019 20 000 units
2020 20 000 units
Tax is payable at 30 per cent and will be paid in the year after the profit is generated,
The required rate of return is 10 per cent
Required:
(c) What the other methods are available to evaluate investment projects and discuss the issues that must be considered if these methods are used to make an investment decision.
In: Accounting
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Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently at its target debt-equity ratio of .75. It’s considering building a new $47 million manufacturing facility. This new plant is expected to generate aftertax cash flows of $5.9 million in perpetuity. The company raises all equity from outside financing. There are three financing options: |
| 1. |
A new issue of common stock: The flotation costs of the new common stock would be 7.7 percent of the amount raised. The required return on the company’s new equity is 15 percent. |
| 2. |
A new issue of 20-year bonds: The flotation costs of the new bonds would be 3.3 percent of the proceeds. If the company issues these new bonds at an annual coupon rate of 5.6 percent, they will sell at par. |
| 3. |
Increased use of accounts payable financing: Because this financing is part of the company’s ongoing daily business, it has no flotation costs and the company assigns it a cost that is the same as the overall firm WACC. Management has a target ratio of accounts payable to long-term debt of .10. Assume there is no difference between the pretax and aftertax accounts payable costs. |
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What is the NPV of the new plant? Assume that PC has a 23 percent tax rate. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar amount, e.g., 1,234,567.) |
***Note: Answer is NOT $5,567,662 nor $8,243,446
Please get it right as I am submitting this question for the third time and am running out of questions. Thanks!
In: Finance
Part I– Check your file system
Step 1: Execute the ls /dev/sd* command to see the current hard disk devices.
Step 2. Execute the fdisk -l command to list the current hard disk partitions
Step 3. Execute the parted -l command to list the current hard disk partition table.
Part II– Create a new virtual disk
Step 1. In the Oracle VM VirtualBox Manager program, create a new virtual hard disk with the size of 200 MB, and name it as “your_name.vdi” (for example, jbondsvdi).
Step 2. Load this virtual hard disk to your virtual machine.
Step 3. Repeat the steps in Part I, and highlight the differences
Part III– Creating Partitions and Filesystems
Step 1. Use the fdisk command to create a new primary partition on the new hard disk.
Step 2. Use the correct command to create an ext4 filesystem on the new partition.
Step 3. Repeat the steps in Part I, and highlight the differences
Step 4. Make a new directory named /cyse. And mount the new partition under this directory.
Step 5. Use the df command to check the mounting point of the new partition.
Step 6. Create a new file named file1.txt in the directory /cyse and put your name in that file
Step 7. Unmount /cyse directory.
Step 8. Check the contents in /cyse directory. What do you find?
In: Computer Science
Your company needs $ 15 million to build a new assembly line. Your target debt-to-equity ratio is 0.6. The cost of issuing new equity is 8%, while the cost of issuing debt is 5%. What is the real cost of the new assembly line if you factor in issuance costs?
In: Finance
The board of executives decides on creating a new position as chief security officer, however, they are not sure if the new position should be part of it department and report to the chief It officer or the new CSO should be the same level to CIO and directly report to the board. What would be your recommendation as a security consultant and why?
In: Computer Science
In: Economics
Name and discuss in detail the concept that describes the decision of the owners of a new soccer club coming to Los Angeles, to build a new stadium there. In doing so, the owners of the new soccer club will analyze the project to determine if it is an acceptable investment, or not. You should include the criteria for the project selection in your discussion
In: Accounting
Big Bang Disruption is affecting the fields of Education, Healthcare, Transportation (Taxi Services) and Travel -Lodging (Hotels). Explain with examples of new businesses (or new ventures).? Existing companies will enjoy an advantage in new-business creation only if they build on their strengths. Why so? Explain this with the case of Intel Corp
In: Operations Management
Add the operation Insert to the linkedListClass. An Insert operation inserts a new item after a given key in the linked list. The method headline can be void Insert(int item, int key), where the first parameter is the new item, and the second parameter is the key of the item before the new item.
In: Computer Science
New Zealand's government has increased its spending this year, leading to a growing budget deficit.
At the same time, the Reserve Bank of New Zealand (New Zealand's central bank) said it would continue to try to stimulate the economy. This stimulus is likely to lead to rising prices for consumer goods, even as the prices of producer goods remain low.
1.How should we expect inflation as measured by CPI and as measured by the GDP deflator to compare to each other in the future in New Zealand? Why?
2.Inflation in New Zealand is expected to pick back up in the near future.
How will this inflation affect the economy? Your answer should discuss costs, benefits, winners, and losers from this inflation.
In: Economics