look it over and give me your opinion You open the report and find the following estimates (in millions of dollars) 1 31000 18 500 2 31.000 18 600 9 31.000 10 31.000 18.600 18 600 12 400 12 400 1.540 1.840 2.300 2300 Sales revenue -Cost of goods sold Gross profit - General, sales, and administrative expenses -Depreciation Net operating income -Income tax Net income 8.2600 8.2600 2891 2891 5.369 5.369 12.400 1.840 2.300 8.2500 2.891 5.369 12.400 1.840 2.300 8.2600 2891 5.369 b. If the cost of capital for this project is 13%, what is your estimate of the value of the new project? Value of project million (Round to three decimal places) TOUT DOSS 1 your desk, and compas. takes sense. Detore we spend the 23 equipment needed for
look it over and give me your opinion You open the report and find the following estimates (in millions of dollars) 1 31000 18 500 2 31.000 18 600 9 31.000 10 31.000 18.600 18 600 12 400 12 400 1.540 1.840 2.300 2300 Sales revenue -Cost of goods sold Gross profit - General, sales, and administrative expenses -Depreciation Net operating income -Income tax Net income 8.2600 8.2600 2891 2891 5.369 5.369 12.400 1.840 2.300 8.2500 2.891 5.369 12.400 1.840 2.300 8.2600 2891 5.369 b. If the cost of capital for this project is 13%, what is your estimate of the value of the new project? Value of project million (Round to three decimal places) TOUT DOSS 1 your desk, and compas. takes sense. Detore we spend the 23 equipment needed for
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
Related questions
Question
Kk.381.
Transcribed Image Text:You are a manager at Northern Fibre, which is considering expanding its operations in synthetic fibre manufacturing. Your boss comes into your office, drops a consultant's report on your desk, and complains. "We owe these consultants $1.8 million for this report, and I am not sure their analysis makes sense. Before we spend the $23 million on new equipment needed for this project,
look it over and give me your opinion." You open the report and find the following estimates (in millions of dollars):
Sales revenue
- Cost of goods sold
= Gross profit
- General, sales, and administrative expenses
- Depreciation
= Net operating income
- Income tax
= Net income
1
2
31.000 31.000
18.600 18.600
12.400 12.400
1.840 1.840
2.300
2.300
8.2600 8.2600
2.891 2.891
5.369
5.369
9
10
31.000 31.000
18.600 18.600
12.400 12.400
1.840 1.840
2.300 2.300
8.2600 8.2600
2.891 2.891
5.369
5.369
b. If the cost of capital for this project is 13%, what is your estimate of the value of the new project?
Value of project = $ million (Round to three decimal places.)
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