You expect that you will need to replace your furnace in 4 years at a cost of $15,067. How
much must you save today in an account that pays 3.18% APR (compounded monthly) to exactly pay the $15,067 in 4 years?
In: Finance
Third State Bank wants to add a new branch office. It has determined that the cost of construction of the new facility will be $1.5 million with another $500,000 in organizational costs. The bank has estimated that it will generate $319,522 per year in net revenues for 20 years. If Third State requires a 17% return on its money, what is this project's net present value?
In: Finance
Figures are in millions of dollars
| Net sales | $ | 2,473.8 |
| Cost of goods sold (COGS) | $ | 1,316.2 |
| Operating expenses (S&GA) | $ | 575.8 |
| Inventory | $ | 250.1 |
| Accounts receivable | $ | 36.7 |
| Other current assets | $ | 68.9 |
| Fixed assets | $ | 690.0 |
What's the net profit margin? $____ Show work.
What's the net profit margin %? _____ Show work.
What's the value of total assets? $____ Show work.
What's the asset turnover ? $____ Show work.
What's the return on assets (ROA)? $____ Show work.
In: Finance
State TWO (2) factors that differentiate between the Rate of Return and Cost of Capital.
In: Finance
Daily Enterprises is purchasing a $10.3 million machine. It will cost $47,000 to transport and install the machine. The machine has a depreciable life of five years and will have no salvage value. The machine will generate incremental revenues of $4.2 million per year along with incremental costs of $1.1 million per year. If Daily's marginal tax rate is 35% what are the incremental earnings (net income) associated with the new machine?
The annual incremental earnings is what ? $ (Round to the nearest dollar.)
In: Finance
The COFD (Cost of farm debt) will always be smaller when done on a market basis than on a cost basis? Why or why not?
What can a farm do to increase ROFE? Explain.
ROFE > ROFA > COFD. Is this a positive or negative use of leverage? Explain
Why does a firm need liquidity?
Can a firm be liquid and not solvent? Or vice versa? Explain
In: Finance
Frankenstein Bicycles has an unlevered cost of equity of 0.15. Their bonds are worth 435,721 and their equity is worth 323,527. The debt rate is 0.02 and their tax rate is 0.22. What is Frankenstein's cost of levered equity?
In: Finance
A project is expected to cost $85096 up front, and then return $23768 in year 1, $45414 in year 2, and $32710 in year 3. If the company demands a 8% return from their projects, what is the net present value of this project? Answers should be to the nearest cent. If your answer is negative please write it as "$-100.03" with the dollar sign before the negative so blackboard can read it correctly.
In: Finance
Assume ABC Company has chosen to invest in new manufacturing equipment. The initial cost of the equipment is $1,200,000. The equipment has a useful life of 20 years. The company uses straight-line depreciation. Their tax rate is 30%. Their weighted average cost of capital is 10%. The new equipment is expected to increase net cash flows by $500,000 in year 1, $350,000 in years 2 through 4, and $100,000 in years 5 through 10. Using all four investment assessment methods (IRR, ARR, NPV, or payback), perform the calculations for this project. Based on just ONE of your calculations should the project be accepted or rejected? Critique the results of the other three calculations you completed. Do they all support your accept/reject decision? Which assessment method is the best? The yearly cash flow is ATCF
In: Finance
You expect that you will need to replace your furnace in 4 years at a cost of $15,777. How
much must you save today in an account that pays 3.5% APR (compounded monthly) to exactly pay the $15,777 in 4 years?
In: Finance