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A firm needs to raise $950,000 but will incur flotation costs of 5%. How much will it pay in flotation costs?
$50,000
$55,000
$55,500
$47,500
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- A company only has £2,000 to invest at time t0 in projects P, Q and R. Each project is infinitely divisible but cannot be undertaken more than once. Project Investment at t0 NPV P £700 £224 Q £1,000 £360 R £1,500 £510 How much should be invested in project R to maximise the NPV achieved? A £0 B £1,000 C £1,350 D £2,000An auto part company is deciding whether to sponsor a racing team for a cost of $1 million. The sponsorship would last for three years and is expected to increase cashflows by $570,000 per year. If the discount rate is 6.9%, what will be the change in the value of the company if it chooses to go ahead with the sponsorship? Group of answer choices A $498, 597 B 747,896 C $710,000 D $847,615H1. Account Rahul has an amount of N 300,000 which is invested in a business. He desires 15% return on his fund. It is known from the past cost data analysis that fixed costs are N 150,000 per annum and variable costs of operation are 60% of sales. Determine sales volume to get 15% return. Also tell shut down point of the business, if he would spend N 50,000 even if business must be closed.
- An interior design studio is trying to choose between the following two mutually exclusive design projects: Year 0 1 2 3 Cash Flow Cash Flow (0) -$64,000 31,000 31,000 31,000 a-1 If the required return is 10 percent, what is the profitability index for both projects? (Round your answers to 3 decimal places. (e.g., 32.161)) Project I Project II -$18,000 9,700 9,700 9,700 Profitability Index a-2 If the company applies the profitability index decision rule, which project should the firm accept? O Project I O Project II Project I Project II b-1 What is the NPV for both projects? (Round your answers to 2 decimal places. (e.g., 32.16)) O Project I Project II NPV b-2lf the company applies the NPV decision rule, which project should it take?¿How much is the Customer Lifetime Value? (Select best answer) Assumptions: Retention Rate= 75%, Average annual customer purchase $20,000, 30.2% Contribution Margin, Annual Fixed costs $100,000 ($5,000 por customer), i=Cost of Capital=.10, Growth=0, no new cash investments. Seleccione una: a. 0 or less (Negative value) b. 100 c. 500 d. 750 e. 1000 f. 2000 g. 3000 h. 4000 i. 5000 j. 6000 k. 7000 l. 8000 m. 9000 n. 9500 o. 10000 or overA firm must decide between two silicon layer chip designs from Intel. Their effective income tax rate is 24%, and MACRS depreciation is used. If the desired after-tax return on investment is 12% per year, which design should be chosen? Design A Design B $1,140,000 $960,000 $1,810,000 $1,110,000 Capital investment MV at end of useful life Annual revenues less $250,000 $370,000 expenses 5 years 7 years 5 years 6 years MACRS property class Useful life Click the icon to view the GDS Recovery Rates (r,) for the 5-year property class. ..... Calculate the AW value for the Design A. AWA(12%) = $| (Round to the nearest dollar.) Calculate the AW value for the Design B. AWR(12%) = S (Round to the nearest dollar.) Based on the AW values, should be chosen.
- A firm is considering a project with an annual cash flow of $200,000. The project would have a 7-year life, and the company uses a discount rate of 10 percent. Ignoring income taxes, what is the maximum amount the company could invest in the project and have the project still be acceptable? a. $973,600 b. $718,200 c. $200,000 d. $1,400,000 Please donot give answer in image format and it should be in step by step format and provide fast solutionA firm must decide between two silicon layer chip designs from Intel. Their effective income tax rate is 20%, and MACRS depreciation is used. If the desired after-tax return on investment is 10% per year, which design should be chosen? State your assumptions.I need a detailed explanation to solve this problem. A company has the following mutually exclusive projects. Year Project-A Project-B 0 $26,000 $29,000 1 $15,000 $16,000 2 $11,500 $10,000 3 $3,500 $11,500 a)- Calculate the payback period for each project. - How many years for Project A - How many years for Project B b)-If the company's payback period is two years, which of the project should you chose? * Project A or Project B * Both Projects or Neither Projects c)- If the discount rate is 13%, what is the NPV for each Project? d) If the discount rate is 13%, which project should the company chose? * Project A or Project B * Both Project s or Neither Project
- A company is thinking of investing in one of two potential new products for sale. The projections are as follows: Year Revenue/cost £ (Product A) Revenue/cost £ (Product B)0 (150,000) outlay (150,000) outlay 1 24,000 12,0002 24,000 25,3333 44,000 52,0004 84,000 63,333 Calculate the IRR for Product B only using 3% and 15% to 2 d.p.Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $6,000 and sell its old washer for $2,000. The new washer will last for 6 years and save $1,500 a year in expenses. The opportunity cost of capital is 16%, and the firm’s tax rate is 21%. a. What is NPV if the firm investment is entitled to immediate 100% bonus depreciation? (Do not round intermediate calculations. Round your answer to 2 decimal places.)No excel
