Need Answer of this General Accounting A distributor of medical textbooks, HealthEd Publishing, is planning for growth. Theircurrent annual sales are $180,000 and are projected to reach $250,000 next year.Operating expenses are 55% of sales each year. If the tax rate is 30% and annualstraight-line depreciation is $20,000, calculate the cash flow one year from today.

Step 1: Definition of Free Cash Flow (FCF):Free Cash Flow is the cash generated by a company after…

Answered: A distributor of medical textbooks,…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 20EA: Towson Industries is considering an investment of $256,950 that is expected to generate returns of...

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Your company is planning to purchase a new log splitter for is lawn and garden business. The new splitter has an initial investment of $180,000. It is expected to generate $25,000 of annual cash flows, provide incremental cash revenues of $150,000, and incur incremental cash expenses of $100,000 annually. What is the payback period and accounting rate of return (ARR)?
A dry cleaning store is expected to make annual cash flows forever. The cost of capital for the store is 14.33 percent. The next annual cash flow is expected in one year from today and all subsequent cash flows are expected to grow annually by 3.35 percent. What is the value of the dry cleaning store if the cash flow in 5 years from today is expected to be $243,000.00? O $1,486,339.98 (plus or minus 10 dollars) O $1,939,822.58 (plus or minus 10 dollars) O $1,132,929.58 (plus or minus 10 dollars) O $2,213,114.75 (plus or minus 10 dollars) O $1,695,743.20 (plus or minus 10 dollars)
Victoria Enterprises expects earnings before interest and taxes (EBIT) next year of $2.1 million. Its depreciation and capital expenditures will both be $286,000, and it expects its capital expenditures to always equal its depreciation. Its working capital will increase by $47,000 over the next year. Its tax rate is 35%. If its WACC is 10% and its FCFs are expected to increase at 5% per year in perpetuity, what is its enterprise value? The company's enterprise value is $ (Round to the nearest dollar.)
Jen Law Firm is evaluating a project that must create a revenue of $4,600 in the 1st year, $5,200 in the 2nd year, $5,900 in the 3rd year, and $5,700 in the 4th year. The firm receives each cash flow at the end of each year. If the required return of Jen Law Firm is 12%, compounding semi-annually, how much will be the future value of these cash flows at the end of the 4th year?
A retail coffee company is planning to open new coffee 95 outlets that are expected to generate $13.3 million in free cash flows per year, with a growth rate of 3.3% in perpetuity. If the coffee company's WACC is 10.6%, what is the NPV of this expansion?
Your firm is evaluating a project that should generate revenue of P4,600 in year one, P5,200 in year two, P5,900 in year three, and P5,700 in year four. the firm receives each cash flow at the end of each year. If your firm's required return is 12%, compounding semi-annually, what is the future value of these cash flows at the end of year four?
Vijay
Victoria Enterprises expects earnings before interest and taxes (EBIT) next year of $1.6 million. Its depreciation and capital expenditures will both be $301,000, and it expects its capital expenditures to always equal its depreciation. Its working capital will increase by $47,000 over the next year. Its tax rate is 30%. If its WACC is 8% and its FCFs are expected to increase at 5% per year in perpetuity, what is its enterprise value?
Crarytown Motors is expected to have an EBIT of $680,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $45,000, $9,000, and $40,000respectively. All cash flow items are expected to grow at 6 percent per year for two years. After Year 3, the CFA is expected to grow at 3 percent indefinitely. The company currently has $3.5 million in debt and 250,000 shares outstanding The company's WACC is 9.5 percent and the tax rate is 20 percent. What is the present value of terminal value? Show your steps.
A start-up company expects to spend $100,000 the first year for advertising, with amounts decreasing by $10,000 each year. Income is expected to be $400,000 the first year, increasing by $50,000 each year. Determine the equivalent annual worth in years 1 through 5 of the company’s net cash flow at an interest rate of 16% per year
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local delivery service is looking to increase their capacity by hiring more workers and purchasing new vehicles. They anticipate their yearly revenue to increase by $45,000 each year for the next 10 years. Additionally, they anticipate having an additional $12,500 every 3 years starting in year 2 due to local event that requires a significant amount of shipping. Assuming an interest rate of 6%, compute the equivalent present worth of the revenue this company will generate from these sources of revenue over this 10 year period. Answer: $359508.75

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