how much external funding is needed for the capital investment project?
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During the year, Stan Company earned net come of P60,000. For next year, it has a capital budget of P80,000. If the company's plowback ratio is 30%, how much external funding is needed for the capital investment project?
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- A company needs to decide whether or not to proceed with a 8-year project, which is expected to create after-tax cash inflows of $375,000 annually during the 8 years. A $2,000,000 cash outflow would be required at the begininng of the project. If the company requires a 9% return on investment, what is the NPV for this project? 4A project’s initial cost is 13 million. The company expects a net cashflow of 10 million in year one, but the net cashflow is expected to decrease 1 million each year for the next years. If the company’s MARR is 12%, using NPW/NFW analysis is the project profitable in the first 5 years?The following table presents sales forecasts for Golden Gelt Giftware. The unit price is $40. The unit cost of the giftware is $25. Year Unit Sales 1 22,000 2 30,000 3 14,000 4 5,000 Thereafter 0 It is expected that net working capital will amount to 20% of sales in the following year. For example, the store will need an initial (Year 0) investment in working capital of 0.20 × 22,000 × $40 = $176,000. Plant and equipment necessary to establish the giftware business will require an additional investment of $200,000. This investment will be depreciated using MACRS and a 3-year life. After 4 years, the equipment will have an economic and book value of zero. The firm’s tax rate is 30%. The discount rate is 20%. Use the MACRS depreciation schedule. a. What is the net present value of the project? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
- An investment project requires a net investment of $100,000 and is expected to generate annual net cash inflows of $25,000 for 6 years. The firm's cost of capital is 12%. Determine the profitability index for this project.Prestwood Products Company's cost of capital is 11.2% and the company is considering two mutually exclusive projects. In the past, it usually takes about 5 years for the company to recoup its investments from a good project. The projects' expected cash flows are as follows: What is project A's payback period?Winview Clinic is evaluating a project that costs $52,125 and has expected net cash inflows of $12,000 per year for eight years. The first inflow occurs one year after the cost outflows, and the project has a cost of capital of 12%. b. What is the project's NPV? Its IRR? Its MIRR?
- A company's weighted average cost of capital is 9.4% per year. A project requires an investment of $15,000 today and it is expected to generate after-tax cash flows of $9,000 at the end of year 1, $5,000 at the end of year 2, and $4,000 at the end of year 3. What is the project's annual modified internal rate of return (MIRR)? A) 9.8% B) 10.5% C) 12.3% D) 1 11.4% E) 8.9%An investment project requires a net investment of 100,00. The project is expected to generate annual net cash inflows of 28,000 for the next 5 years. The firm's cost of capital is 12 percent. Determine the net present value of for the projectABC company has a budgeting project. Machinery costs $60,000,000 with a 6 year life. Sales are $50,000,000 each year for 6 years. Cost of goods sold is $30,000,000 a year with depreciation expense. Marginal Tax Rate is 30%. What is the NPV of the project if the cost of capital is 12%? What is the IRR?
- A new garbage truck can be purchased for $64,000. Its expected useful life is six years at which time its market value will be zero. Annual receipts is expected to be $20,000 with expenses of $2,000 per year over the six-year study period. The company's MARR is 18%. a. What is the ROI? b. Determine if this is a good investment using Net Present Worth(NPW) method. What is its Net Annual Worth? с. d. Using IRR method, is this investment acceptable?Database Systems is considering expansion into a new product line. Assets to support expansion will cost $500,000. It is estimated that Database can generate $1,990,000 in annual sales, with an 7 percent profit margin. What would net income and return on assets (investment) be for the year?A 50- year project has a cost of $500,000 and has annual cash flows of $100,000 in years 1-25, and $200,000 in years 26-50. The company's required rate is 8%. Given this information, calculate the payback of the project
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