Problem 10.14 Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires...
Problem 10.14 Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,111,359. have a life of five years, and would produce the cash flows shown in the following table. Year Cash Flow 1 $602,952 2 -287,525 3 933,809 4 998,838 5 771,435
What is the NPV if the discount rate is 12.91 percent? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.) NPV is $
Problem 11.20 Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $11.80 million. This investment will consist of $2.90 million for land and $8.90 million for trucks and other equipment. The land, all trucks, and all other equipment is expected to be sold at the end of 10 years at a price of $5.24 million, $2.50 million above book value. The farm is expected to produce revenue of $2.02 million each year, and annual cash flow from operations equals $1.82 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 9 percent. Calculate the NPV of this investment. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.) NPV $
The project should be
Problem 11.24 Bell Mountain Vineyards is considering updating its current manual accounting system with a high-end electronic system. While the new accounting system would save the company money, the cost of the system continues to decline. The Bell Mountain’s opportunity cost of capital is 13.0 percent, and the costs and values of investments made at different times in the future are as follows: Year Cost Value of Future Savings (at time of purchase) 0 $5,000 $7,000 1 4,450 7,000 2 3,900 7,000 3 3,350 7,000 4 2,800 7,000 5 2,250 7,000 Calculate the NPV of each choice. (Round answers to the nearest whole dollar, e.g. 5,275.) The NPV of each choice is: NPV0 = $ NPV1 = $ NPV2 = $ NPV3 = $ NPV4 = $ NPV5 = $ Suggest when should Bell Mountain buy the new accounting system? Bell Mountain should purchase the system in .
Problem 12.24 Chip’s Home Brew Whiskey management forecasts that if the firm sells each bottle of Snake-Bite for $20, then the demand for the product will be 15,000 bottles per year, whereas sales will be 84 percent as high if the price is raised 18 percent. Chip’s variable cost per bottle is $10, and the total fixed cash cost for the year is $100,000. Depreciation and amortization charges are $20,000, and the firm has a 30 percent marginal tax rate. Management anticipates an increased working capital need of $3,000 for the year. What will be the effect of the price increase on the firm’s FCF for the year? (Round answers to nearest whole dollar, e.g. 5,275.) At $20 per bottle the Chip’s FCF is $ and at the new price Chip’s FCF is $ .
Problem 13.11 Capital Co. has a capital structure, based on current market values, that consists of 42 percent debt, 12 percent preferred stock, and 46 percent common stock. If the returns required by investors are 9 percent, 11 percent, and 19 percent for the debt, preferred stock, and common stock, respectively, what is Capital’s after-tax WACC? Assume that the firm’s marginal tax rate is 40 percent. (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.) After tax WACC = %
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xxxxx you so much !!!!!! xxx xxxxxx the tutorial. I am very xxxx xxx xxxx xx xxxxxxxxxx by xxxxxxxxx these xxxxxxxxx for xxxx xxxxxxx help me by giving a xxxx review to this xxxxxx Well, xxxxx I xxxxxx xxxxxxx xxx to refer xx xx xxxx xxxxxxx and xxxx xxxx poor person xx make xx xxxxxxxxxxx xxxxxx help me xx xxxxxxx refine xx xxxxxxxx towards you xx xxxxxxxxxx
xx x xxxx any xxxx xx xxxx xxxx xxx rest of xxx class or other classes xxxxxxxx let xx know.
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x would be xxxxx to xxxx xxx
file1.xlsx preview (1147 words)
|xxxxxx THE DATA xx xxxxxx xxxxx xx xxx ANSWER|
|xxxxx||Briarcrest xxxxxxxxxx is a xxxxxxxxxxxx xxxxx Recently, xx xxxxxxxxx x new xxxxxxx for producing xxxxxxx xxx process xxxxxxxx new machinery|
|xxxx xxxxx xxxx||xxxxxxxxxxxxxx||xxxx x xxxx xx xxxx years, and would xxxxxxx xxx cash xxxxx xxxxx xx the following table.|
|What is xxx xxx if xxx discount xxxx xx||15.9x||percent|
|yearx||xxxx Flow||xxx 15.9%||Discounted cash xxxx|
|xxx x xxxxxxx xxxx xxx xxxxxxxxx||2x||xxxxxxxxxxxxx||x 0.7444x||xxxxxxxxxxxxx|
|Less : xxxxxxx investmentx||$1,968,450.00|
|xxxxxx||xxxxxx Daniels Midland xxxxxxx xx xxxxxxxxxxx buying a xxx xxxx that xx plans xx xxxxxxx xxx 10 years. xxx farm xxxx require xx xxxxxxx|
|xxxxxxxxxx ofx||$12.00||xxxxxxxx xxxx xxxxxxxxxx will consist xx xxxxx million xxx land and $10.00 million xxx trucks xxx other equipment.|
|The land, all trucks, xxx xxx other xxxxxxxxx is xxxxxxxx xx be xxxx at the xxx of xx xxxxx xx x price xxx||$5.00x||xxxxxxxx|
|xxxxxx||xxxxxxx above book xxxxxx xxx xxxx is xxxxxxxx to xxxxxxx xxxxxxx of $2.00 million each year, and xxxxxx xxxx xxxx|
|xxxx operations||equals||xxxxx||million. xxx marginal xxx xxxx is||xx||xxxxxxxx and|
|xxx xxxxxxxxxxx xxxxxxxx xxxx xxx||10||xxxxxxxx xxxxxxxxx the xxx xx this investment.|
|(10 xxxxxx||xxx||xxxxxxxx 10%||xxxxxxx xxxxx|
|ax||xx||x x a x|
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