Answered: If your firm has an Operating Cash flow…

If your firm has an Operating Cash flow of $180,000 with a -$75,000 change in Net Working Capital, what must your Capital Spending be to have a Cash Flow from Assets of $320,000? (-$65,000)

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

See similar textbooks

Related questions

Q: Suppose a firm has the following information: Cash = $500,000; shortterm investments = $2.5 million;…

A: Cash = $500,000 short term investment= $2.5 million accounts receivable = $1.2 million inventories =…

Q: QUESTION 2. management whether it should be accepted 21%. Evaluate the following investment project…

A: IRR is the rate at which NPV of the project is zero.

Q: I need step by step solution

A: We have given data, Sales = $502,000Depreciation expense = $47,000Profit margin = 5%Tax rate = 35%…

Q: The following information is available for Multicomm Limited : Asset/Sales is 0.9, change in sales…

A: The internally generate funds can be calculated as per AFN equation

Q: EMC has a current free cash flow of 1 million is expected to grow at a constant rate of 5%. The…

A: The value of firm’s operation can be calculated with the help of below formula,

Q: I need help with question is answer

A: As per the data shared by Dog House:Sales = $502,000Depreciation expense = $47,000Profit margin =…

Q: Using PROBLEM 1, how much is the projected net income for 2022?

A: 1. A projected income statement depicts earnings and deficits for a certain future time, such as the…

Q: QUESTION 2. Evaluate the following investment project according to the internal rate of return and…

A: Information Provided: WACC = 21% Cash flow (0) = (250,000) Cash flow (1) = (100,000) Cash flow (2) =…

Q: Assume that a firm has Sales of $25,000,000, total assets of $20,000,000, current assets of…

A: AFN or additional funds need refers to the additional funds needed by a company to expand or carry…

Q: Your firm is deciding whether to invest in a project. Although long-term to estimate, management has…

A: Free cash flows are cash flow available from the operations of the firm after adding non-cash…

Q: Calculate the enterprise value of a firm with a market capitalization (market value of equity) of…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: A firm's current investment opportunity schedule and the weighted marginal cost of capital schedule…

A: Capital rationing: It is the demonstration of putting limitations on how much new ventures or tasks…

Q: Need help

Q: You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm's…

A: Operating cash flows (OCF) is the cash flows generated from normal operations- Selling and producing…

Q: Assume that a firm has Sales of $25,000,000, total assets of $20,000,000, current assets of…

A: AFN or additional funds need refers to the additional funds needed by a company to expand or carry…

Q: According to the net present value method of capital budgeting, which investment(s) should the firm…

A: NPV: It is the difference between the present value of cash inflows and cash outflows. If the NPV…

Q: Consider a company with EBIT of $450,000, tax rate of 25%, depreciation and amortization expenses of…

A: Free cash flow is the amount of cash flow available to investors after the firm has met all…

Q: Example 2 • A company is ready to invest in a new project that will cost $500,000. Out of the total…

A: The question is related to Cost of Capital. The weighted Average Capital is the overall cost of…

Q: 3. For a firm with the following info., what is the Net Working Capital? Prepaid expenses=$2…

A: Net Working Capital :— Net Working is the Difference between the Total Current Assets - Total…

Q: You are considering an investment in Ray company, and want to evaluate the firm's free cash flow.…

A: Operating Cash flows are the Cash inflows and Cash outflows that result from carrying of business.…

Q: Quarterly working capital levels for your firm for the next year are included in the following…

A: Working capital means amount of capital or funds needed for daily operations in the business. Net…

Q: Calculate the ROI and calculate the Economic Profit.

A: Return on investment can be calculated with the formula ROI = Net IncomeInvestment=16,000100,000=…

Q: A risky $500,000 investment is expected to generate the following cash flows: Year…

A: Given information: Initial investment is $500,000 Cost of capital is 10% Probability is 80%, 75% and…

Q: Skunk Products' EBIT is $1000, its tax rate is 35%, depreciation is $100, capital expenditures are…

A: Given EBIT is $1000 Tax rate is 35%

Q: Calculate a firm's free cash flow if it has net operating profit after taxes of R60,000,…

A: Free cash flow to the firm (FCFF) represents the cash flow from operations available for…

Q: Solve this problem

A: To calculate the operating cash flow (OCF) using the information provided, we can use the following…

Q: You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm’s…

A: Free cash flows refer to the cash generated by the business organization from its operational…

Q: The ABS company has a capital base of $250 million, an opportunity cost of capital (A) of 17%, a…

A: Economic value added 9EVA) measures the performance of company based on residual wealth calculated…

Q: If a company is expected to generate annual cash flow of $500,000 and has a WACC of 12.5%, then the…

A: The valuation of a company is calculated with help of the revenue before subtracting operating…

Q: You have gathered this information on a firm: $500,000 sales, $10,000 cash dividends, $300,000 cost…

A: Free cash flow is an important measure or metric of a company’s financial performance. It represents…

Q: Assuming a firm's weighted average cost of capital is 11%, what is the net present value (NPV) of…

A: NPV means Net present value.It is calculated by deducting initial investment from present value of…

Q: BNB bank estimates that its total revenues will amount to $350 million, and its total expenses…

A: The term revenue represents gross earnings generated from selling goods or services to the…

Q: Eagle Products’ EBIT is $500, its tax rate is 35%, depreciation is $25, capital expenditures are…

A: In finance and in the domain of valuation free cash flow is a very important metric.Essentially free…

Q: If the level of capital is $150 billion, depreciation is 3%, and gross investment is $50 billion.…

A: Capital is the value which invested in the business. Net investment (NI) is the difference of gross…

Q: Suppose a firm has the following information: Cash = $500,000; short-term investments = $2.5…

A: Operating current assets are the assets such as, cash, inventory and accounts receivables that are…

Q: I want the correct answer

A: To find the operating cash flow (OCF) for The Dog House, we need to first determine the net income…

Q: Presented below is the forecasted data for ABC Corporation: 2023 Sales Cost of Sales Operating…

A: The revenue that an entity earns from its basic operations is regarded as its operating cash flow.…

Q: A firm produces $85 million of net income on $1,250 million of assets. Investors expect a 5 percent…

A: Net income = $85 million Capital assets = $1,250 million Expected return = 0.05 or 5% Economic…

Q: How much is its free cash flow during that period?

A: The amount of cash available to a corporation after covering the costs of doing business is measured…

Q: if a company has $10,000 in cash, $7,000 in A/R, S2,000 in prepaid expenses, S8,000 in inventory,…

A: The working capital is calculated as the difference between the current assets and current…

Q: A firm has net fixed assets of $38,215, long-term debt of $560, cash of $22,400, accounts payable…

A: Working capital is the difference between current assets and current liabilities of an organization.…

Q: You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm's…

A: NOPATC [Net operating profit after tax] shows operating income after tax without considering any…

Q: 5. Eagle Products' EBIT is $680, its tax rate is 30%, depreciation is $42, capital expenditures are…

A: Free Cash FlowThe cash left over after a business has paid its operating costs and maintained its…

Question

If your firm has an Operating Cash flow of $180,000 with a -$75,000 change
in Net Working Capital, what must your Capital Spending be to have a Cash
Flow from Assets of $320,000? (-$65,000)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Explanation of cash flow from assets

VIEW

Step 2: Calculation of the capital spending

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

What is the internal rate of return of a capital investment project that has the followingafter-tax cash flows for a company that requires a 15% rate of return on the project?Time Cash Flow0 -$4,0001 5002 2,000 3 5,000
Spellbound Solutions estimated future capital investment needs aré $ 1200m, and the estimated future net income is $1200m. If the company finances itself with 40 percent debt and 60 percent equity, how much in dividends can the company afford to pay? a. $0m b. $420m c. $480m d. $720m e. $900
Q) For a given company studies indicate that due to the nature of contract business, any excess funds generated are expected to earn at a rate of 11% per year. Use the ROIC method to determine the rate of return on invested capital value for the given cash flow series.(X0=$2,000, X1=$-900, X2=$-7,000, X3=$6,900) Explain it early but not in excel works. Typed or handwriting onlys
You are considering an investment in Fields and Struthers, Inc., and want to evaluate the firm's free cash flow. From the income statement, you see that Fields and Struthers earned an EBIT of $64 million, had a tax rate of 21 percent, and its depreciation expense was $5 million. Fields and Struthers's NOPAT gross fixed assets increased by $30 million from 2020 and 2021. The firm's current assets increased by $26 million and spontaneous current liabilities increased by $15 million. Calculate Fields and Struthers's NOPAT operating cash flow for 2021. (Enter your answer in millions of dollars rounded to 2 decimal places.) Operating cash flow Calculate Fields and Struthers's NOPAT investment in operating capital for 2021. (Enter your answer in millions of dollars.) Investment in operating capital million Free cash flow Check my work million million Calculate Fields and Struthers's NOPAT free cash flow for 2021. (Enter your answer in millions of dollars rounded to 2 decimal places.)
A firm with the following investment opportunities has a capital budget of $10,000. According to the net present value technique, which investments should the firm make if the firm's cost of capital is 10%? Investment A B C Cost $10,000 $7,000 $3,000 Cash Inflow $12,000. $8,600 $4,000
) Suppose a company’s current free cash flow (i.e. FCF0) is $100 million and is expected to grow at a constant rate of 5 percent. If the company’s overall cost of capital is 15 percent, what is the current value of operations? $ 913 million $1,000 million $1,050 million $1,500 million $2,000 million
Estimate a firm's economic value added (EVA) based on the following information: NOPAT = $400,000; amount of financial capital used = $1,600,000; and WACC = 19%. $26,000 $36,000 $96,000 54,000
I need the answer as soon as possible
What is the net effect on a firm's cash flow from changes in net working capital if a new project requires: $ 30,000 increase in inventory, $ 10,000 increase in accounts receivable, $35,000 increase in machinery, and a $20,000 increase in accounts payable?
Assume a firm has EBAT of $590,000, and no amortization. It is in a 40 percent tax bracket. a. Compute its cash flow. $ 354,000 b. Assume it has $590,000 in amortization. Recompute its cash flow. $ 590,000 c. How large a cash flow benefit did the amortization provide? $T] Cash flow Cash flow Benefit in cash flow
The free cash flow for Synco, Inc. equals $100,000. The firm made fixed asset investments of $50,000, and operating working capital increased by $50,000. What was the after-tax cash flow from operations? Select one: a. $100,000 b. $200,000 C. $150,000 d. $0
I need help with both questions

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS