3.2 calc
xlsx
keyboard_arrow_up
School
Texas Tech University *
*We aren’t endorsed by this school
Course
5320
Subject
Finance
Date
Apr 3, 2024
Type
xlsx
Pages
14
Uploaded by koolbabu007
Questions 1-5
Asset Cost
$10,000,000 0
1
Years
6
Sales
$6,600,000 Depr Method
Straight Line
Costs
$2,400,000 Depr
$1,666,666.67 Units
600,000
EBIT
$2,533,333.33 Costs
$4 Taxes
$532,000.00 Price
$11 NI
$2,001,333.33 Rate
12%
Tax Rate
21%
OCF
$3,668,000.00 NCS
($10,000,000)
$0.00
MV_6
$0 CFA
-10000000
$3,668,000.00 BV_3?
$5,000,000.00 OCF_4?
$3,668,000.00 NPV
$5,080,642.06 Price
$130 Sunk Cost
$1,250,000 Opp Cost
$2,500,000 Asset Cost
$5,000,000 Years
5
BV_3?
$2,000,000 Depr Method
Straight Line
Salvage
$0 MV_5
$600,000 Rate
10%
Tax Rate
21%
0
1
2
3
4
Units
18,000
22,000
24,000
22,000
Raiders Restaurant is considering the purchase of a $10,000,000 flat-top grill. The grill has an economic life of 6 years and will be fully depreciated using the straight-line method. The grill is expected to produce 600,000 tacos per year for the next 6 years, each taco costing $4 to make and priced at $11. Assume the discount rate is 12% and the tax rate is 21%. The restaurant expects the market value of the grill to be $0, 6 years from now. Calculate the book value of the grill at the end of year 3. (Round to 2 decimals)
Madetaylor Inc. manufactures financial calculators. The company is deciding whether to introduce a new calculator. This calculator will sell for $1
be 18,000, 22,000, 24,000, 22,000, and 18,000 units annually for the next five years. Variable costs will be 21% of sales, and fixed costs are $500,
marketing team to analyze the product's viability, and the marketing analysis cost $1,250,000. The company plans to manufacture and store the c
Based on a recent appraisal, the warehouse and the property are worth $2.5 million after tax. If the company does not sell the property today, it currently appraised value. This project will require an injection of net working capital at the onset of the project, $250,000. The firm recovers the
project. The firm must purchase equipment for $5,000,000 to produce the new calculators. The equipment has a 5-year life and is depreciated u
end of the project, the anticipated salvage value is 0. Surprisingly, the firm can sell the machine at the end of the project for $600,000. The firm r
and has a tax rate of 21%.
Calculate the sunk cost of the project. (Enter a positive value and round to the nearest dollar)
Sales
$2,340,000 $2,860,000 $3,120,000 $2,860,000 VC
$491,400 $600,600 $655,200 $600,600 FC
$500,000 $500,000 $500,000 $500,000 wa
Depr
$1,000,000 $1,000,000 $1,000,000 $1,000,000 EBIT
$348,600 $759,400 $964,800 $759,400 Taxes
$73,206 $159,474 $202,608 $159,474 NI
$275,394 $599,926 $762,192 $599,926 dNWC
-$250,000
$0
$0
$0
$0
OCF
$1,275,394
$1,599,926
$1,762,192
$1,599,926
Opp Cost
-$2,500,000
$0
$0
$0
$0
NCS
-$5,000,000
$0
$0
$0
$0
CFA
-$7,750,000
$1,275,394
$1,599,926
$1,762,192
$1,599,926
NPV
-$57,796.42
2
3
4
5
6
$6,600,000 $6,600,000 $6,600,000 $6,600,000 $6,600,000 $2,400,000 $2,400,000 $2,400,000 $2,400,000 $2,400,000 $1,666,666.67 $1,666,666.67 $1,666,666.67 $1,666,666.67 $1,666,666.67 $2,533,333.33 $2,533,333.33 $2,533,333.33 $2,533,333.33 $2,533,333.33 $532,000.00 $532,000.00 $532,000.00 $532,000.00 $532,000.00 $2,001,333.33 $2,001,333.33 $2,001,333.33 $2,001,333.33 $2,001,333.33 $3,668,000.00 $3,668,000.00 $3,668,000.00 $3,668,000.00 $3,668,000.00 $0.00
$0.00
$0.00
$0.00
$0.00
$3,668,000.00 $3,668,000.00 $3,668,000.00 $3,668,000.00 $3,668,000.00 5
18,000
130. The company feels that sales will ,000 annually. The firm hired a calculators in a vacant warehouse. will sell it five years from today at the e net working capital at the end of the using the straight-line method. At the requires a 10% return on its investment
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
$2,340,000 $491,400 $500,000 $1,000,000 $348,600 $73,206 $275,394 $250,000
$1,275,394
$2,500,000
$474,000
<<ATSV = MV - (MV - BV) * t
$4,499,394
1
5,000,000.00
5,000,000.00
2
1,666,666.67
1,666,666.67
3
-10000000
-10000000
4
3668000
3668000
5
5,080,642.06
5,080,642.06
6
1,250,000
1,250,000
7
2,500,000
2,500,000
8
250,000
250,000
9
2,000,000.00
2,000,000.00
10
1,000,000.00
1,000,000.00
11
474,000.00
474,000.00
12
1,275,394.00
1,275,394.00
13
-5,250,000.00
-7750000.00
14
1,999,394.00
4,499,394.00
15
889,900.27
-57,796.42
Questions 1 - 4
Year
Project A
Project B
nominal
11%
0
-$160,000
-$109,000
infl
5%
1
$60,000
$40,000
2
$60,000
$40,000
real?
5.7143%
3
$60,000
$40,000
4
$60,000
$40,000
5
$60,000
$40,000
NPV?
$61,753.82
$60,812.31
Questions 5 - 7
Machine A
A
0
1
Asset Cost
$7,000,000 Sales
$4,000,000 Years
6
VC
$1,000,000 VC
25% of sales
FC
$500,000 FC
$500,000 Depr
$1,166,667 EBIT
$1,333,333 Machine B
Taxes (21%)
$280,000 Asset Cost
$10,000,000 NI
$1,053,333 Years
10
VC
15% of sales
OCF
$2,220,000
FC
$750,000 NCS
-$7,000,000
$0
CFA
-$7,000,000
$2,220,000
Sales (each)
$4,000,000 Rate
9%
NPV_A?
$2,958,739 EAC_A?
Tax Rate
21%
Depr Method
Straight Line
B
0
1
Sales
$4,000,000 Arya Co. is considering the following two independent projects. The cash flows for Project A are expressed in nominal terms, while Project B's are expressed in real terms. The appropriate nominal discount rate is 11%, and the inflation rate is 5%. Using the exact Fisher equation, calculate the real discount rate. (Enter percentages as decimals and round to 4 decimals).
Jax Inc is considering the purchase of a new machine for the production of computers. Machine A
years. Variable costs are 25% of sales, and fixed costs are $500,000 annually. Machine B costs $1
Variable costs for the machine are 15% of sales, and fixed costs are $750,000 annually. The sales per year. The required rate of return is 9%, the tax rate is 21%, and both machines will be depreci
with no salvage value.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
VC
$600,000 FC
$750,000 Depr
$1,000,000 EBIT
$1,650,000 Taxes (21%)
$346,500 NI
$1,303,500 OCF
$2,303,500
NCS
-$10,000,000
$0
CFA
-$10,000,000
$2,303,500
NPV_B?
$4,783,074.51 EAC_B?
Questions 8 - 10
Asset Cost
$450,000 0
1
Years
5
Costs
$85,000
Costs
$85,000 Depr
$90,000
Sales
$0 EBIT
-$175,000
Depr Method
Straight Line
Taxes (21%)
-$36,750
Rate
9%
NI
-$138,250
Salvage
$100,000 Tax Rate
21%
OCF?
-$48,250
NCS
-$450,000
$0
CFA
-$450,000
-$48,250
NPV?
-$586,331.09 EAC?
Questions 11 - 13
Scholastic Co. is evaluating a machine with an initial cost of $450,000 and a five-year life that costs $85,000 per year to operate (assume sales = $0). The firm uses straight-line depreciation; the applicable discount rate is 9%. The machine will have a salvage value of $100,000 at the end of the project's life. The firm has a tax rate of 21%. Note: do not include the salvage value when calculating the annual depreciation expense.
Raph Inc. needs someone to supply it with 1,000,000 planks of wood per year to support its manu
next six years, and your company has decided to bid on the contract. It will cost your firm $5,000
necessary to start production. The equipment will be depreciated using the straight-line method t
The salvage value of the equipment is expected to be 0. Your fixed costs will be $2,000,000 annua
production costs are $14 per plank. You also need an initial investment in net working capital of $
recovered at the end of the project. The firm has a tax rate of 21%, and the required rate of retur
Units
1,000,000
0
1
Years
6
Sales
$17,484,857 Asset Cost
$5,000,000 Units
1,000,000
Depr Method
Straight Line
FC
$2,000,000 Salvage
$0 VC
$14,000,000 FC
$2,000,000 Depr
$833,333 VC
$14 per plank
EBIT
$651,524 Initial Investment
$2,000,000 <<NWC, recoTaxes (21%)
$136,820 Tax Rate
21%
NI
$514,704 Rate
10%
OCF
$1,348,037
Bid price
$17.484857 <<guess
dNWC
-$2,000,000
$0
NCS
-$5,000,000
$0
CFA
-$7,000,000
$1,348,037
NPV
$0.00
Question 14
Sales
$18,000,000 VC
$6,000,000 FC
$3,000,000 Depr
$4,000,000 EBIT
$5,000,000 Taxes
$1,050,000 21%
NI
$3,950,000 OCF?
$7,950,000 $7,950,000 Question 15
Time
CF
(1 + nom) = (1 + infl)(1 + real)
0
-25,000
real
3%
1
10,000
infl
5%
2
10,000
3
10,000
nom?
8.15%
4
10,000
NPV?
$8,010.98
Suppose a firm has the following pro forma information:
ABC Inc. forecasts the following nominal cash flows for a project:
The real rate is 3%, and the inflation rate is 5%. Calculate the NPV for the project. (Round t
(1 + nom) = (1 + infl)(1 + real)
2
3
4
5
6
$4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $500,000 $500,000 $500,000 $500,000 $500,000 $1,166,667 $1,166,667 $1,166,667 $1,166,667 $1,166,667 $1,333,333 $1,333,333 $1,333,333 $1,333,333 $1,333,333 $280,000 $280,000 $280,000 $280,000 $280,000 $1,053,333 $1,053,333 $1,053,333 $1,053,333 $1,053,333 $2,220,000
$2,220,000
$2,220,000
$2,220,000
$2,220,000
$0
$0
$0
$0
$0
$2,220,000
$2,220,000
$2,220,000
$2,220,000
$2,220,000
$659,561.52
2
3
4
5
6
7
$4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 A costs $7,000,000 and will last for six 10,000,000 and will last for ten years. for each machine will be $4,000,000 iated using straight-line depreciation
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
$600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $750,000 $750,000 $750,000 $750,000 $750,000 $750,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,650,000 $1,650,000 $1,650,000 $1,650,000 $1,650,000 $1,650,000 $346,500 $346,500 $346,500 $346,500 $346,500 $346,500 $1,303,500 $1,303,500 $1,303,500 $1,303,500 $1,303,500 $1,303,500 $2,303,500
$2,303,500
$2,303,500
$2,303,500
$2,303,500
$2,303,500
$0
$0
$0
$0
$0
$0
$2,303,500
$2,303,500
$2,303,500
$2,303,500
$2,303,500
$2,303,500
$745,299.10 2
3
4
5
$85,000
$85,000
$85,000
$85,000
$90,000
$90,000
$90,000
$90,000
-$175,000
-$175,000
-$175,000
-$175,000
-$36,750
-$36,750
-$36,750
-$36,750
-$138,250
-$138,250
-$138,250
-$138,250
-$48,250
-$48,250
-$48,250
-$48,250
$0
$0
$0
$79,000
<<ATSV
-$48,250
-$48,250
-$48,250
$30,750
$150,741.30 ufacturing needs over the 0,000 to install the equipment to 0 over the project's life. ally, and your variable $2,000,000, which will be rn is 10%.
2
3
4
5
6
$17,484,857 $17,484,857 $17,484,857 $17,484,857 $17,484,857 1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
$2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $14,000,000 $14,000,000 $14,000,000 $14,000,000 $14,000,000 $833,333 $833,333 $833,333 $833,333 $833,333 $651,524 $651,524 $651,524 $651,524 $651,524 $136,820 $136,820 $136,820 $136,820 $136,820 $514,704 $514,704 $514,704 $514,704 $514,704 $1,348,037
$1,348,037
$1,348,037
$1,348,037
$1,348,037
$0
$0
$0
$0
$2,000,000
$0
$0
$0
$0
$0
$1,348,037
$1,348,037
$1,348,037
$1,348,037
$3,348,037
)
to 2 decimals)
8
9
10
$4,000,000 $4,000,000 $4,000,000
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
$600,000 $600,000 $600,000 $750,000 $750,000 $750,000 $1,000,000 $1,000,000 $1,000,000 $1,650,000 $1,650,000 $1,650,000 $346,500 $346,500 $346,500 $1,303,500 $1,303,500 $1,303,500 $2,303,500
$2,303,500
$2,303,500
$0
$0
$0
$2,303,500
$2,303,500
$2,303,500
1
0.0571
0.0571
0.0571
1
2
61,753.82
61,753.82
61,753.82
2
3
60,812.31
60,812.31
60,812.31
3
4
accept both
accept both
accept both
4
5
4,783,074.51
4,783,075.51
4,783,076.51
5
6
1,408,853
-1,408,853
659561.516956
6
7
745,299.10
745,299.10
745,299.10
7
8
-48,250
-48,250
-48,250
8
9
-586,331.09
-586,331.09
-586,331.09
9
10
150,741.30
150,741.30
150,741.30
10
11
-7,000,000.00
-7,000,000.00
-7,000,000.00
11
12
17.485
17.485
17.485
12
13
1,348,037
1,348,037
1,348,037
13
14
7,950,000
7,950,000
7,950,000
14
15
8,780.55
8010.98
8010.98
15
Related Questions
We operate a factory that exclusively produces steel
pipes.
The spreadsheet (ATTACHED AS AN IMAGE) contains
comprehensive monthly data on the pipes produced in
2021 and 2022. Please copy the data into your own
spreadsheet for calculations. Note that the numbers are
entirely fictional and do not reflect real-world figures or
trends.
For each month, the spreadsheet lists all factory costs,
which are categorized into three areas for simplicity:
• Cost of raw materials (steel)
Cost of energy to run the factory
Other costs, including personnel, etc.
Additionally, the spreadsheet provides the revenue
generated by the sales of pipes that were produced in a
given month and sold by the end of 2022.
Here's some additional information:
⚫During this period, the factory produced two types of
pipes: type A and type B, but only one type at a time:
Sometime in 2021, the factory switched from type A to
type B. Type B is slightly larger and was expected to
have a greater market appeal.
⚫Steel is…
arrow_forward
After spending $10,000 on client-development, you have just been offered a big production contract by a new client. The contract will add $200,000 to your revenues for each of the next five years and it will cost you $100,000 per year to make
the additional product. You will have to use some existing equipment and buy new equipment as well. The existing equipment is fully depreciated, but could be sold for $50,000 now. If you use it in the project, it will be worthless at the end of the
project. You will buy new equipment valued at $30,000 and use the 5-year MACRS schedule to depreciate it. It will be worthless at the end of the project. Your current production manager earns $80,000 per year. Since she is busy with ongoing
projects, you are planning to hire an assistant at $40,000 per year to help with the expansion. You will have to immediately increase your inventory from $20,000 to $30,000. It will return to $20,000 at the end of the project. Your company's tax
rate is 35% and your…
arrow_forward
R Choose the correct answer below
More Info
Investment cost
$120
$170
$270
$420
$540
$720
(thousands)
Annual revenue
minus expense
(thousands)
$17
$44.5
$57
$89 5
Si11.5
$145.5
IRR on total
14.2%
26 2%
21.1%
21.3%
20.6%
20.2%
investment
Print
Done
Check Answer.
arrow_forward
Q2 need urgent
arrow_forward
Year 1
Year 2
Year 3
Year 4
Sales (units)
Sales price
4,200
4,100
4,300
4,400
$29.82 $30.00
Variable cost per unit
Fixed costs, excluding depreciation
Accelerated depreciation rate
$12.15 $13.45
$41,000 $41,670
33%
45%
$30.31 $33.19
$14.02 $14.55
$41,890 $40,100
15%
7%
.
D
This project will require an investment of $20,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year
life. Black Sheep Broadcasting pays a constant tax rate of 40%, and it has a required rate of return of 11%.
When using accelerated depreciation, the project's net present value (NPV) is
When using straight-line depreciation, the project's NPV is
Using the
depreciation method will result in the greater NPV for the project.
No other firm would take on this project if Black Sheep Broadcasting turns it down. How much should Black Sheep Broadcasting reduce the NPV of this
project if it discovered that this project would reduce one of its division's net after-tax cash flows by…
arrow_forward
A
B
C
D
E
F
G
H
1 Create a income statement and show net cashflow each year for the 4 years so you can use it for what-if analysis.
2
3 Base case Inputs:
4
5
6
4-year life of the project
$26/unit Sales price of product
7
$13/unit Cost to produce the product
8 $1450/year operating costs
9
1250 units First-year production
16% Increase in production each year
1012345167819202123 24 25 26
14 Answer the following question for "what if analysis"
16 What is the IRR for the Base case?
17
$32,000 Initial investment depreciated with MACRS 3 year recovery
28% tax rate
What is the IRR if the volume produced does not increase by 16%/year, but only increased 10%/yr.?
What is the IRR if the sales price is only $24/unit?
What is the IRR if the tax rate increases to 49%?
20 What is the IRR if the initial investment is $39,000?
18
19
22 Which analysis should your company be most concerned about?
I
J
k
arrow_forward
answer plz account subject solve
arrow_forward
C3
arrow_forward
Year 1
Year 2
Year 3
Year 4
Unit sales
4,200
4,100
4,300
4,400
Sales price
$29.82
$30.00
$30.31
$33.19
Variable cost per unit
$12.15 $13.45 $14.02
$14.55
Fixed operating costs except depreciation
Accelerated depreciation rate
$41,000
33%
$41,670
45%
$41,890
15%
$40,100
7%
This project will require an investment of $25,000 in new equipment. The equipment will have no salvage value at the end of the project's
four-year life. Fox pays a constant tax rate of 40%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the
project's net present value (NPV) would be when using accelerated depreciation.
Determine what the project's net present value (NPV) would be when using accelerated depreciation. (Note: Round your intermediate
calculations to the nearest whole number.)
arrow_forward
YouTube
am 2 i
66
ints
01:55:35
Maps
Mc
Graw
Multiple Choice
13
A firm expects to sell 11,500 units. The expected variable cost per unit is $314 and the expected fixed costs are $647,000. The depreciation expense is $187,000. The sales price is estimated
at $850 per unit. The tax rate is 21%. What is the operating cash flow based on this analysis?
O
O
Traducir
O
$5,330,000
$4,210,700
$5,517,000
y! TWTR 59.87 1.67 2....
$4,397,700
Saved
Help
4
Save & Exit
ENG @x
arrow_forward
QUESTION 9
Amotor vehicle which cost £30,000 is depreciated at 20% per annum using the reducing balance
method. The depreciation charge for the second
year
would be:
a. £13,800
b.E8,000
c. £4,800
24,000x20%=£4,800
d.£7,200
arrow_forward
Get correct answer accounting questions
arrow_forward
3
ts
eBook
Hint
Print
-ferences
A proposed new investment has projected sales of $515,000. Variable costs are 47
percent of sales, and fixed costs are $130,000; depreciation is $50,500. Prepare a pro
forma income statement assuming a tax rate of 22 percent. What is the projected net
income? (Input all amounts as positive values. Do not round intermediate
calculations.)
Sales
Variable costs
Fixed costs
Depreciation
EBT
Taxes
Net income
arrow_forward
Kindly answer the 6 and 7 thank you
arrow_forward
fx
1
2
4
5 Units Sales
Sales Price
Q Q
6
7 Equipment & Shipping
8 Inventory
9 Revenue
10 Operating Cost
11 Tax
12 WAAC
13
14 Year
15 Revenue
16 Operating Cost
17 Depreciation
18 EBIT
19
V Drink Template
Numbers below are adjusted from previous problem, but are similar
Modify this template to solve the remaining problems
Invesment Outlays
Calibri
Taxes on operating income 40%
20 EBIT (1-T)
21 Depreciation
22 Free Cash Flow
23 Cumulative payback
24 NPV
IRR
25
26 Payback
B
11. BI U 3 Α'
200000
$2.00
$500,000.00
$25,000.00
$400,000.00
$200,000.00
40%
12%
0
$(400,000.00)
C
с
$(525,000.00)
$400,000.00
-$200,000.00
-$83,333.33
$116,666.67
$46,666.67
$70,000.00
$83,333.33
$153.333.33
$(371,666.67)
88
D
Depreciation
2 -
Payback
2
$400,000.00
-$200,000.00
-$83,333.33
$116,666.67
$46,666.67
$70,000.00
$83,333.33
$153,333.33
$(218,333.33)
E
$83,333.33
3
F
4
$400,000.00 $400,000.00
-$200,000.00 -$200,000.00
-$83,333.33 -$83,333.33
$116,666.67 $116,666.67
$46,666.67 $46.666.67
$70,000.00
$70,000.00…
arrow_forward
Fast pls solve this question correctly in 5 min pls I will give u like for sure
Savtrik
arrow_forward
A3
arrow_forward
None
arrow_forward
Week 8 Excel Spreadsheet to be used with the Practice Set:
Years
Acquisition stage cash flow:
Initial Outlay
Operating stage cash flow:
Sales
Fixed Cost
Variable Cost
Depreciation expense
Taxable income
Taxes
0
(800,000)
1
2
3
4
5
6
7
8
After tax income
Add back depreciation
Operating cash flows
600,000 600,000 600,000 600,000
(220,000) (220,000) (220,000) (220,000)
(240,000) (240,000) (240,000) (240,000)
(68,000) (68,000) (68,000) (68,000)
72,000 72,000 72,000 72,000
(20,160) (20,160) (20,160) (20,160)
51,840 51,840 51,840
68,000 68,000 68,000
119,840 119,840 119,840
51,840
68,000
119,840
600,000 600,000 600,000 600,000
(220,000) (220,000) (220,000) (220,000)
(240,000) (240,000) (240,000) (240,000)
(68,000) (68,000) (68,000) (68,000)
72,000 72,000 72,000 72,000
(20,160) (20,160) (20,160) (20,160)
51,840 51,840 51,840 51,840
68,000 68,000 68,000 68,000
119,840 119,840 119,840 119,840
Disposition stage cash flow:
500,000
Total cash flow
Present Value
(800,000)
872,591
119,840
119,840…
arrow_forward
Year 1 Year 2 YR 1 YR2Sales (S) $ 614,405.00 $ 600,343.00 Cost of Good Sold (COGS) $ 385,101.00 $ 473,396.00 Gross Profit (GP) $ 229,304.00 $ 226,947.00 Calculate the following: (round to nearest percent) Answer Answer(a) Mark-up percent for year 1 (b) Mark-up percent for year 2 (c) Gross Profit for year 1 (d) Gross Profit for year 2
arrow_forward
Question Content Area
Present value of $1
Periods
6%
8%
10%
12%
14%
16%
1
0.94340
0.92593
0.90909
0.89286
0.87719
0.86207
2
0.89000
0.85734
0.82645
0.79719
0.76947
0.74316
3
0.83962
0.79383
0.75131
0.71178
0.67497
0.64066
4
0.79209
0.73503
0.68301
0.63552
0.59208
0.55229
5
0.74726
0.68058
0.62092
0.56743
0.51937
0.47611
6
0.70496
0.63017
0.56447
0.50663
0.45559
0.41044
7
0.66506
0.58349
0.51316
0.45235
0.39964
0.35383
8
0.62741
0.54027
0.46651
0.40388
0.35056
0.30503
9
0.59190
0.50025
0.42410
0.36061
0.30751
0.26295
10
0.55839
0.46319
0.38554
0.32197
0.26974
0.22668
Present value of an annuity of $1
Periods
6%
8%
10%
12%
14%
16%
1
0.94340
0.92593
0.90909
0.89286
0.87719
0.86207
2
1.83339
1.78326
1.73554
1.69005
1.64666
0.74316
3
2.67301
2.57710
2.48685
2.40183
2.32163
0.64066
4
3.46511
3.31213
3.16987
3.03735
2.91371
0.55229
5
4.21236
3.99271
3.79079
3.60478
3.43308
0.47611
6
4.91732
4.62288
4.35526
4.11141
3.88867
0.41044
7
5.58238
5.20637…
arrow_forward
(Corporate income tax) Sales for J. P. Hulett Inc. during the past year
amounted to $3.7 million. Gross profits totaled $1.04 million, and operating
and depreciation expenses were $494,000 and $352,000, respectively.
Dividend income for the year was $10,000, which was paid by a firm in
which Hulett owns 85 percent of the shares. Use the corporate tax rates
shown in the popup window, , to Comcute the corporation's tax liability.
What are the firm's average and marginal tax rates?
The firm's tax liability for the year is $. (Round to the nearest dollar.)
arrow_forward
Project Bono
Project Edge
Project Clayton
Capital investment
$160,000
$190,000
$206,000
Annual net income:
Year 1
15,120
19,440
29,160
2
15,120
18,360
24,840
3
15,120
17,280
22,680
4
15,120
12,960
14,040
5
15,120
9,720
12,960
Total
$75,600
$77,760
$103,680
Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash
flows occur evenly throughout the year.)
Click here to view PV table.
(a)
Your Answer
Correct Answer (Used)
Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)
(b)
Project Bono
3.40
years
Project Edge
3.41
years
Project Clayton
3.10
years
* Your answer is incorrect.
Compute the net present value for each project. (Round answers to O decimal places, e.g. 125. If the net present value is negative, use
either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in
the factor table…
arrow_forward
Image answer me
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you
Related Questions
- We operate a factory that exclusively produces steel pipes. The spreadsheet (ATTACHED AS AN IMAGE) contains comprehensive monthly data on the pipes produced in 2021 and 2022. Please copy the data into your own spreadsheet for calculations. Note that the numbers are entirely fictional and do not reflect real-world figures or trends. For each month, the spreadsheet lists all factory costs, which are categorized into three areas for simplicity: • Cost of raw materials (steel) Cost of energy to run the factory Other costs, including personnel, etc. Additionally, the spreadsheet provides the revenue generated by the sales of pipes that were produced in a given month and sold by the end of 2022. Here's some additional information: ⚫During this period, the factory produced two types of pipes: type A and type B, but only one type at a time: Sometime in 2021, the factory switched from type A to type B. Type B is slightly larger and was expected to have a greater market appeal. ⚫Steel is…arrow_forwardAfter spending $10,000 on client-development, you have just been offered a big production contract by a new client. The contract will add $200,000 to your revenues for each of the next five years and it will cost you $100,000 per year to make the additional product. You will have to use some existing equipment and buy new equipment as well. The existing equipment is fully depreciated, but could be sold for $50,000 now. If you use it in the project, it will be worthless at the end of the project. You will buy new equipment valued at $30,000 and use the 5-year MACRS schedule to depreciate it. It will be worthless at the end of the project. Your current production manager earns $80,000 per year. Since she is busy with ongoing projects, you are planning to hire an assistant at $40,000 per year to help with the expansion. You will have to immediately increase your inventory from $20,000 to $30,000. It will return to $20,000 at the end of the project. Your company's tax rate is 35% and your…arrow_forwardR Choose the correct answer below More Info Investment cost $120 $170 $270 $420 $540 $720 (thousands) Annual revenue minus expense (thousands) $17 $44.5 $57 $89 5 Si11.5 $145.5 IRR on total 14.2% 26 2% 21.1% 21.3% 20.6% 20.2% investment Print Done Check Answer.arrow_forward
- Q2 need urgentarrow_forwardYear 1 Year 2 Year 3 Year 4 Sales (units) Sales price 4,200 4,100 4,300 4,400 $29.82 $30.00 Variable cost per unit Fixed costs, excluding depreciation Accelerated depreciation rate $12.15 $13.45 $41,000 $41,670 33% 45% $30.31 $33.19 $14.02 $14.55 $41,890 $40,100 15% 7% . D This project will require an investment of $20,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. Black Sheep Broadcasting pays a constant tax rate of 40%, and it has a required rate of return of 11%. When using accelerated depreciation, the project's net present value (NPV) is When using straight-line depreciation, the project's NPV is Using the depreciation method will result in the greater NPV for the project. No other firm would take on this project if Black Sheep Broadcasting turns it down. How much should Black Sheep Broadcasting reduce the NPV of this project if it discovered that this project would reduce one of its division's net after-tax cash flows by…arrow_forwardA B C D E F G H 1 Create a income statement and show net cashflow each year for the 4 years so you can use it for what-if analysis. 2 3 Base case Inputs: 4 5 6 4-year life of the project $26/unit Sales price of product 7 $13/unit Cost to produce the product 8 $1450/year operating costs 9 1250 units First-year production 16% Increase in production each year 1012345167819202123 24 25 26 14 Answer the following question for "what if analysis" 16 What is the IRR for the Base case? 17 $32,000 Initial investment depreciated with MACRS 3 year recovery 28% tax rate What is the IRR if the volume produced does not increase by 16%/year, but only increased 10%/yr.? What is the IRR if the sales price is only $24/unit? What is the IRR if the tax rate increases to 49%? 20 What is the IRR if the initial investment is $39,000? 18 19 22 Which analysis should your company be most concerned about? I J karrow_forward
- answer plz account subject solvearrow_forwardC3arrow_forwardYear 1 Year 2 Year 3 Year 4 Unit sales 4,200 4,100 4,300 4,400 Sales price $29.82 $30.00 $30.31 $33.19 Variable cost per unit $12.15 $13.45 $14.02 $14.55 Fixed operating costs except depreciation Accelerated depreciation rate $41,000 33% $41,670 45% $41,890 15% $40,100 7% This project will require an investment of $25,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. Fox pays a constant tax rate of 40%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project's net present value (NPV) would be when using accelerated depreciation. Determine what the project's net present value (NPV) would be when using accelerated depreciation. (Note: Round your intermediate calculations to the nearest whole number.)arrow_forward
- YouTube am 2 i 66 ints 01:55:35 Maps Mc Graw Multiple Choice 13 A firm expects to sell 11,500 units. The expected variable cost per unit is $314 and the expected fixed costs are $647,000. The depreciation expense is $187,000. The sales price is estimated at $850 per unit. The tax rate is 21%. What is the operating cash flow based on this analysis? O O Traducir O $5,330,000 $4,210,700 $5,517,000 y! TWTR 59.87 1.67 2.... $4,397,700 Saved Help 4 Save & Exit ENG @xarrow_forwardQUESTION 9 Amotor vehicle which cost £30,000 is depreciated at 20% per annum using the reducing balance method. The depreciation charge for the second year would be: a. £13,800 b.E8,000 c. £4,800 24,000x20%=£4,800 d.£7,200arrow_forwardGet correct answer accounting questionsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you