Can you please solve this financial accounting problem? ABC Systems reported the following on their statement of cash flows for2021 and 2022:Year Net Cash Flow fromNet Cash Flow from Net Cash Flow fromOperating ActivitiesInvesting ActivitiesFinancing Activities2021 $410,000$(320,000)$(50,000)2022 $445,000$(305,000)$(55,000)Eighty-five percent of the net cash flow used for investing activities was usedto replace existing capacity.Required:Calculate their free cash flow for 2021 and 2022.

Step 1: Define Free Cash Flow (FCF)Free Cash Flow (FCF) represents the amount of cash a company…

Answered: ABC Systems reported the following on…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 32BE

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First United Bank Inc. is evaluating three capital investment projects using the net present value method. Relevant data related to the projects are summarized as follows: BranchOfficeExpansion ComputerSystemUpgrade ATMKioskExpansion Amount to be invested $686,053 $516,654 $295,458 Annual net cash flows: Year 1 411,000 288,000 177,000 Year 2 382,000 259,000 122,000 Year 3 349,000 230,000 89,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 20%, prepare a net present value analysis for each project. Use the…
Calculate the internal rate of return (IRR) of the following cash flows: Year 0 1 2 3 4 5 6 7 Cash Flow (1,650,000) 330,000 365,000 380,000 415,000 405,000 370000 294,000 Answer:
Beyer Company is considering the purchase of an asset for $320,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows $ 76,000 $ 44,000 $ 70,000 $ 250,000 $ 17,000 $ 457,000 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.)
Sanka Company is considering the purchase of an asset for $360,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Year 1 Year 2 Year 3 Year 4 Year 5 Total Net cash flows $80,000 $50,000 $70,000 $250,000 $13,000 $463,000 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.) Cumulative Net Cash Inflow Year Cash Inflow (Outflow) (Outflow) $ (360,000) 1 3 4 Payback period %3D
The following table tracks the main components of working capital over the life of a four-year project. 2021 2022 2023 2024 2025 Accounts receivable 0 174,000 249,000 214,000 0 Inventory 87,000 142,000 142,000 107,000 0 Accounts payable 31,000 56,000 62,000 41,000 0 Calculate net working capital and the cash inflows and outflows due to investment in working capital.
Beyer Company is considering the purchase of an asset for $400,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Year 1 Year 2 $80,000 Year 3 Year 4 Year 5 Total Net cash flows $80,000 $70,000 $200,000 $15,000 $445,000 Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your Payback Period answer to 2 decimal place.) Cumulative Net Cash Inflow Year Cash Inflow (Outflow) (Outflow) 2$ (400,000) 3 4 Payback period = 2.
The following table tracks the main components of working capital over the life of a four-year project. 2024 2025 0 194,000 0 97,000 36,000 0 Accounts receivable Inventory Accounts payable Net working capital Cash flows 2021 2021 0 77,000 26,000 2022 154,000 132,000 51,000 Calculate net working capital and the cash inflows and outflows due to investment in working capital. Note: Negative answers should be indicated by a minus sign. 2023 229,000 132,000 52,000 2022 2023 2024 2025
Calculate Computron’s free cash flow. Identify what you think are Computron’s “net Uses” of its FCF. Hint: FCF = NOPAT - Net investment in capital from previous to current year. Computron's Balance Sheets (Millions of Dollars) 2019 2020 Assets Cash and equivalents $ 60 $ 50 Short-term investments 100 10 Accounts receivable 400 520 Inventories 620 820 Total current assets $ 1,180 $ 1,400 Gross fixed assets $ 3,900 $ 4,820 Less: Accumulated depreciation 1,000 1,320 Net fixed assets $ 2,900 $ 3,500 Total assets $ 4,080 $ 4,900 Liabilities and equity Accounts payable $ 300 $ 400 Notes payable 50 250 Accruals 200 240 Total current liabilities $ 550 $ 890 Long-term bonds 800 1,100 Total liabilities $ 1,350 $ 1,990 Common stock 1,000 1,000 Retained earnings 1,730 1,910 Total equity $ 2,730 $ 2,910 Total liabilities and equity $ 4,080 $ 4,900 Computron's Income Statement (Millions of Dollars) 2019 2020…
Calculating IRR Compute the internal rate of return for the cash flows of the following two projects: Year Project A Project B 0 -$7,300 -$4,390 1 3, 940 2,170 2 3,450 2,210 3 2,480 1,730
Company Express S. A. asks you to construct cash flows for following three (3) investment projects, containing following information:PROJECT 1a. Sales (in ThCh$):- Year 1: 90,000- Year 2: 55,000- Year 3: 75,000- Year 4: 190,000b. Cost of sales is estimated at 53% of sales.c. Depreciation for year is ThCh$ 15,000 per period (period 1 to 3). In year 4 there is a sale of machinery that results in a gain on sale of non-current assets of ThCh$ 9,800. Total depreciation for year 4 is ThCh$ 12,500.d. Administrative expenses are equivalent to 17% of sales.e. In period 0 there is an investment of ThCh$ 58,000.f. There is credit financing of ThCh$ 32,000 which is amortized in equal parts of ThCh$ 8,000 per period with a financial expense of ThCh$ 3,700 per period.g. There is an investment in working capital of ThCh$ 24,000 in period 0, which is recovered in period 4.h. In period 4 there is an investment in land of ThCh$ 40,000.i. Income tax rate is 17%. Calculate: cash flow per period. Please…
The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows: Warehouse Tracking Technology Year Income fromOperations Net CashFlow Income fromOperations Net CashFlow 1 $44,000 $145,000 $92,000 $232,000 2 44,000 145,000 70,000 196,000 3 44,000 145,000 35,000 138,000 4 44,000 145,000 15,000 94,000 5 44,000 145,000 8,000 65,000 Total $220,000 $725,000 $220,000 $725,000 Each project requires an investment of $440,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 10% for purposes of the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683…
Information on four investment proposals is given below:Investment ProposalA B C DInvestment required ........................ $(90,000) $(100,000) $(70,000) $(120,000)Present value of cash inflows ......... 126,000 138,000 105,000 160,000Net present value ............................ $ 36,000 $ 38,000 $ 35,000 $ 40,000Life of the project ............................ 5 years 7 years 6 years 6 yearsRequired:1. Compute the project profitability index for each investment proposal.2. Rank the proposals in terms of preference.

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