alculate the firm's WACC (using 2018 numbers). (You will need to collect information on the long-term debt and common stock equity from the Balance Sheet. The firm has no preferred stock). Use the WACC to calculate NPV and evaluate IRR for proposed capital budgeting projects. Assume the projects are mutually exclusive and the firm has the money available to fund the project. 12/31/2018 12/31/2017 12/31/2016 12/31/2015 Current Assets Cash And Cash Equivalents 8,719,000 10,607,000 9,157,000 9,095,000 Short Term Investments 270,000 8,897,000 6,966,000 2,912,000 Net Receivables 7,140,000 7,021,000 6,693,000 6,436,000 Inventory 3,126,000 2,944,000 2,722,000 2,719,000 Other Current Assets 2,042,000 43,000 31,000 730,000 Total Current Assets 21,297,000 29,512,000 25,569,000 21,892,000 Long Term Investments 2,407,000 2,039,000 1,949,000 2,310,000 Property Plant and Equipment 17,587,000 17,237,000 16,590,000 16,316,000 Goodwill 14,806,000 14,741,000 14,429,000 14,176,000 Intangible Assets 15,823,000 13,835,000 13,432,000 13,080,000 Other Assets 5,122,000 910,000 635,000 749,000 Total Assets 77,042,000 78,274,000 72,604,000 68,523,000 Current Liabilities Accounts Payable 7,211,000 6,724,000 6,157,000 5,545,000 Short/Current Long Term Debt 3,951,000 4,017,000 4,400,000 3,108,000 Other Current Liabilities 6,601,000 4,112,000 3,870,000 3,882,000 Total Current Liabilities 17,763,000 14,853,000 14,427,000 12,535,000 Long Term Debt 28,293,000 33,793,000 30,052,000 29,591,000 Other Liabilities 12,611,000 14,522,000 11,102,000 10,466,000 Total Liabilities 58,667,000 63,168,000 55,581,000 52,592,000 Stockholders' Equity Total Stockholder Equity 18,375,000 15,106,000 17,023,000 15,931,000 12/31/2018 12/31/2017 12/31/2016 12/31/2015 Revenue Total Revenue 51,728,000 57,902,000 56,519,100 56,488,000 Cost of Revenue 23,502,000 25,340,000 25,399,800 25,283,000 Gross Profit 28,226,000 32,562,000 31,119,300 31,205,000 Operating Expenses Selling General and Administrative 19,184,000 20,706,000 21,225,600 20,736,000 Operating Income or Loss 9,042,000 11,856,000 9,893,700 10,469,000 Income from Continuing Operations Other Income/Expenses Net -1,148,000 -1,507,000 -1,508,400 -2,256,000 Interest Expense 1,220,000 1,288,000 1,207,800 853,000 Income Before Tax 6,674,000 9,061,000 7,177,500 7,360,000 Income Tax Expense 2,696,000 4,130,000 1,956,600 1,708,000 Net Income 3,978,000 4,931,000 5,220,900 5,652,000 Year 0 Year 1 Year 2 Year 3 Year 4 Project A -100,000 50,000 30,000 30,000 20,000 Project B -250,000 100,000 100,000 50,000 50,000 Project C -500,000 400,000 50,000 50,000 50,000

alculate the firm's WACC (using 2018 numbers). (You will need to collect information on the long-term debt and common stock equity from the Balance Sheet. The firm has no preferred stock). Use the WACC to calculate NPV and evaluate IRR for proposed capital budgeting projects. Assume the projects are mutually exclusive and the firm has the money available to fund the project. 12/31/2018 12/31/2017 12/31/2016 12/31/2015 Current Assets Cash And Cash Equivalents 8,719,000 10,607,000 9,157,000 9,095,000 Short Term Investments 270,000 8,897,000 6,966,000 2,912,000 Net Receivables 7,140,000 7,021,000 6,693,000 6,436,000 Inventory 3,126,000 2,944,000 2,722,000 2,719,000 Other Current Assets 2,042,000 43,000 31,000 730,000 Total Current Assets 21,297,000 29,512,000 25,569,000 21,892,000 Long Term Investments 2,407,000 2,039,000 1,949,000 2,310,000 Property Plant and Equipment 17,587,000 17,237,000 16,590,000 16,316,000 Goodwill 14,806,000 14,741,000 14,429,000 14,176,000 Intangible Assets 15,823,000 13,835,000 13,432,000 13,080,000 Other Assets 5,122,000 910,000 635,000 749,000 Total Assets 77,042,000 78,274,000 72,604,000 68,523,000 Current Liabilities Accounts Payable 7,211,000 6,724,000 6,157,000 5,545,000 Short/Current Long Term Debt 3,951,000 4,017,000 4,400,000 3,108,000 Other Current Liabilities 6,601,000 4,112,000 3,870,000 3,882,000 Total Current Liabilities 17,763,000 14,853,000 14,427,000 12,535,000 Long Term Debt 28,293,000 33,793,000 30,052,000 29,591,000 Other Liabilities 12,611,000 14,522,000 11,102,000 10,466,000 Total Liabilities 58,667,000 63,168,000 55,581,000 52,592,000 Stockholders' Equity Total Stockholder Equity 18,375,000 15,106,000 17,023,000 15,931,000 12/31/2018 12/31/2017 12/31/2016 12/31/2015 Revenue Total Revenue 51,728,000 57,902,000 56,519,100 56,488,000 Cost of Revenue 23,502,000 25,340,000 25,399,800 25,283,000 Gross Profit 28,226,000 32,562,000 31,119,300 31,205,000 Operating Expenses Selling General and Administrative 19,184,000 20,706,000 21,225,600 20,736,000 Operating Income or Loss 9,042,000 11,856,000 9,893,700 10,469,000 Income from Continuing Operations Other Income/Expenses Net -1,148,000 -1,507,000 -1,508,400 -2,256,000 Interest Expense 1,220,000 1,288,000 1,207,800 853,000 Income Before Tax 6,674,000 9,061,000 7,177,500 7,360,000 Income Tax Expense 2,696,000 4,130,000 1,956,600 1,708,000 Net Income 3,978,000 4,931,000 5,220,900 5,652,000 Year 0 Year 1 Year 2 Year 3 Year 4 Project A -100,000 50,000 30,000 30,000 20,000 Project B -250,000 100,000 100,000 50,000 50,000 Project C -500,000 400,000 50,000 50,000 50,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Calculate the firm's WACC (using 2018 numbers). (You will need to collect information on the long-term debt and common stock equity from the Balance Sheet. The firm has no preferred stock).
Use the WACC to calculate NPV and evaluate IRR for proposed capital budgeting projects. Assume the projects are mutually exclusive and the firm has the money available to fund the project.

	12/31/2018	12/31/2017	12/31/2016	12/31/2015
Current Assets
Cash And Cash Equivalents	8,719,000	10,607,000	9,157,000	9,095,000
Short Term Investments	270,000	8,897,000	6,966,000	2,912,000
Net Receivables	7,140,000	7,021,000	6,693,000	6,436,000
Inventory	3,126,000	2,944,000	2,722,000	2,719,000
Other Current Assets	2,042,000	43,000	31,000	730,000
Total Current Assets	21,297,000	29,512,000	25,569,000	21,892,000

Long Term Investments	2,407,000	2,039,000	1,949,000	2,310,000
Property Plant and Equipment	17,587,000	17,237,000	16,590,000	16,316,000
Goodwill	14,806,000	14,741,000	14,429,000	14,176,000
Intangible Assets	15,823,000	13,835,000	13,432,000	13,080,000
Other Assets	5,122,000	910,000	635,000	749,000
Total Assets	77,042,000	78,274,000	72,604,000	68,523,000

Current Liabilities
Accounts Payable	7,211,000	6,724,000	6,157,000	5,545,000
Short/Current Long Term Debt	3,951,000	4,017,000	4,400,000	3,108,000
Other Current Liabilities	6,601,000	4,112,000	3,870,000	3,882,000
Total Current Liabilities	17,763,000	14,853,000	14,427,000	12,535,000

Long Term Debt	28,293,000	33,793,000	30,052,000	29,591,000
Other Liabilities	12,611,000	14,522,000	11,102,000	10,466,000
Total Liabilities	58,667,000	63,168,000	55,581,000	52,592,000

Stockholders' Equity
Total Stockholder Equity	18,375,000	15,106,000	17,023,000	15,931,000

	12/31/2018	12/31/2017	12/31/2016	12/31/2015
Revenue
Total Revenue	51,728,000	57,902,000	56,519,100	56,488,000
Cost of Revenue	23,502,000	25,340,000	25,399,800	25,283,000
Gross Profit	28,226,000	32,562,000	31,119,300	31,205,000

Operating Expenses
Selling General and Administrative	19,184,000	20,706,000	21,225,600	20,736,000
Operating Income or Loss	9,042,000	11,856,000	9,893,700	10,469,000

Income from Continuing Operations
Other Income/Expenses Net	-1,148,000	-1,507,000	-1,508,400	-2,256,000
Interest Expense	1,220,000	1,288,000	1,207,800	853,000
Income Before Tax	6,674,000	9,061,000	7,177,500	7,360,000

Income Tax Expense	2,696,000	4,130,000	1,956,600	1,708,000
Net Income	3,978,000	4,931,000	5,220,900	5,652,000

	Year 0	Year 1	Year 2	Year 3	Year 4
Project A	-100,000	50,000	30,000	30,000	20,000
Project B	-250,000	100,000	100,000	50,000	50,000
Project C	-500,000	400,000	50,000	50,000	50,000

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