A factory costs $300,000. You forecast that it will product cash inflows of $105,000 in year 1, $165,000 in year 2 and $270,000 in year 3. The discount rat is 11%. what is the value of factory? Is the factory a good investment/

Q: You are preparing to produce some goods for sale. You will sell them in one year and you will incur…

A: To calculate the selling price after 1 year we will use the time value of money formula as follows:…

Q: A specialty chemical company is considering two alternative investments. The first one costs $40,000…

A: GIVEN, R = 8% THE CASHFLOW OF THE TWO INVESTMENTS ARE GIVEN BELOW. YEAR A B 0 -$40000 -$60000…

Q: Lillian is considering using some of the cash generated from her mail-order business to open a…

A: Breakeven Point in Value = Fixed Cost / Pv Ratio PV ratio = Sales % - Varaible Cost %…

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A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: B. CAPITAL BUDGETING Situation: Assume that you are planning to invest for the expansion of your…

A: NPV stand for Net present value, It can be calculated as follows NPV = Present Value of Cash inflows…

Q: An investment with total costs of $9,000 will generate total revenues of $10,000 for one year. Round…

A: Net Present Value(NPV) is excess of PV of inflows over PV of outflows related to investment proposal…

Q: A new project would require an immediate increase in raw materials in the amount $6,000. The firm…

A: Answer -    Net Working capital = Total Current Assets - Total Current Liabilities   Here,  Current…

Q: Salsa Company is considering an investment in technology to improve its operations. The investment…

A: YearNet Cash flow0-$241,0001$47,9002$52,5003$75,4004$94,1005$126,100Discount rate = 9%

Q: Use Excel’s NPV function for this problem. Riverside Inc. has an 8% cost of capital. The firm has an…

A: Net Present Value Formula in Excel for Present Values = NPV( Rate,Values) Rate= 0.08 Values,…

Q: A proposed project has fixed costs of $41,000 per year. The operating cash flow at 10,000 units is…

A: Degree of operating leverage measures the change in operating income by change in in sales. In above…

Q: Jummy Bears is trying to decide if a new product is a viable project. The initial cost in year zero…

A: Net present value(NPV)  is the difference between present value of all cash inflows and present…

Q: Your business partner has just presented to you a summary of projected costs and annual receipts for…

A: IRR is the rate of return a project generates through its lifetime expressed in annual terms. It is…

Q: A factory costs $28000. You forecast that it will produce cash inflows of $80000 in year 1, $140000…

A: The provided information are: Discount rate (r) = 12% = 0.12 Cash outflow = $28000

Q: what is the minimum dollar amount you need to sell the goods for in order for this to be a​…

A: Net Present Value: It is calculated by reducing the initial cost from the total present value of…

Q: You are preparing to produce some goods for sale You will sell them in one year and you will incur…

A: For calculation of sell price we will use time value of money concept where future value of the…

Q: Should the company make this investment?

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Q: Solve

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Q: XYZ Corporation is considering a capital budgeting project and requires a detailed analysis. The…

A: 1.1 Calculating the initial investment:To calculate the initial investment, we can use the payback…

Q: Say, today (Year 0), a small business invests $1,000 to build a small factory. In one year (Year 1),…

A: Net present value (NPV) is the criterion of capital budgeting that calculates the absolute wealth…

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A: Capital Budgeting is the technique for evaluating the alternatives in order to meet the expectations…

Q: A firm is considering taking a project that will produce $ 14 million of revenue per year, Cash…

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Q: nsidering an investment in equipment that would cost $50,000 and provide annual cash inflows of…

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Q: are considering an investment to a project that can generate yearly income of $10,000. If there is a…

A: The expected income is the most probable income considering the different probabilities that are…

Q: You are preparing to produce some goods for sale. You will sell them in one year and you will incur…

A: Net present value is the difference between cash flow and initial cost. This is a financial method…

Q: Tyler, Inc., is considering switching to a new production technology. The cost of the required…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: The going rate of interest for a savings account is 8% percent and the expected profit rate is 5%…

A: Step 1:  Calculate the interest earned on $300,000 in the savings account.Interest earned on…

Q: Your storage firm has been offered $98,100 in one year to store some goods for one year. Assume your…

A: Net present value is the modern methods of capital budgeting that is used to determine the present…

Q: Grady Precision Measurement Tools has forecasted the following sales and costs for a new GPS system:…

A: Calculate the total sales revenue.Total sales revenue = Number of units × Price per unitTotal sales…

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A: Annual Equivalent worth is used to determine the value of an investment by determining equal amounts…

Q: Suppose a company could invest in a machine that would be able to produce $1,000,000 worth of…

A: Cash flow for year 1 = cf1 = $1,000,000 Cash flow for year 2 = cf2 = $2,000,000 Cash flow for year 3…

Q: A factory costs $350, 000. You forecast that it will produce cash inflows of $80, 000 in year 1, $…

A: Initial Cost = i = $350,000Cash Flow for Year 1 = cf1 = $80,000Cash Flow for Year 2 = cf2 =…

Q: Consider the following project data. A marketing study that costs $200 will be conducted at t = 0.…

A: The net present value is the profitability of a project in terms of present value.. The project's…

Q: The Payback Period (assume the operating cashflows are spread evenly over each year) The Accounting…

A: Calculation of Payback Period                   Year Annual Cash Flow Cumulative Cash Flow   1…

Q: A factory costs $810,000. You reckon that it will produce an inflow after operating costs of…

A: Initial cost (I) = $810,000 Annual net cash inflow (C) = $171,000 Period (n) = 11 years Cost of…

Q: Draw a cash flow diagram depicting the net cash flows associated with the purchase, operation, and…

A: Year Cash Flow Working 0 -70,000 (-)62000(-)8000 1 9200 10,000-800 2 10800 12,000-1200 3…

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A: Degree of operating leverage measures the change in operating income by change in in sales. In above…

Q: Pete Nunn is trying to decide whether to go ahead with an investment opportunity that costs $60,000.…

A: PAYBACK PERIOD Payback Period is one the Important Traditional Capital Budgeting Technique. Payback…

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