3.Market Values and Book ValuesBenedict Cruisers, Inc., purchased new cloaking machinery five years ago for $20million. The machinery can be sold to the Allen Inc. today for $18 million.Benedict's current balance sheet shows net fixed assets of $15.5 million, currentliabilities of $700,000, and net working capital of $226,000. If all the currentaccounts were liquidated today, the company would receive $1.08 million cash.a. What is the book value of Benedict's assets today?b. What is Benedict's market value of assets?

Market value refers to the value of the asset if the asset is sold in the current market place.Book…

Answered: Market Values and Book Values Benedict…

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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Klingon Widgets, Inc., purchased new cloaking machinery four years ago for $8 million. The machinery can be sold to the Romulans today for $7.4 million. Klingon's balance sheet shows net fixed assets of $6 million and current assets of $900,000. If all of the firm's current assets were sold today, the company would receive $1.2 million cash. The book value of Klingon's assets is and their market value is .Enter your answers in millions with one decimal place.
None
A corporation can buy a machine for 15,000$ with life of five years and a salvage value (selling price of the machine at end of life of the project) of 1,550$. Net revenues per year are expected to be 7,000$. MARR for this corporation is 15%. Should the corporation invest in this machine? Solve by present worth method. detailed answer without using excel
Initial cash flow: Basic calculation Cushing Corporation is considering the purchase of a new grading machine to replace the existing one. The existing machine was purchased 4 years ago at an installed cost of $20,700; it was being depreciated under MACRS using a 5-year recovery period. (See table for the applicable depreciation percentages.) The existing machine is expected to have a usable life of at least 5 more years. The new machine costs $35,900 and requires $5,500 in installation costs; it will be depreciated using a 5-year recovery period under MACRS. The existing machine can currently be sold for $25,700 without incurring any removal or cleanup costs. The firm is subject to a 21% tax rate. Calculate the initial cash flow associated with the proposed purchase of a new grading machine. The initial cash flow will be $ (Round to the nearest dollar.) Data table covery year 1 HY68L24557 10 11 Totals ... 3 years 33% 45% 15% 7% 100% Percentage by recovery year* 5 years 20% 32% 19% 12%…
Current Attempt in Progress Pharoah Company is considering purchasing new equipment for $451,400. It is expected that the equipment will produce net annual cash flows of $61,000 over its 10-year useful life. Annual depreciation will be $45,140. Compute the cash payback period. (Round answer to 1 decimal place, e.g. 10.5.) Cash payback period years
Alpesh
On January 1, 2021, Gringo Company had capitalized cost of P5,000,000 for a new computer software product with an economic life of 5 years. Sales for 2021 amounted to P3,000,000. The total sales of software over its economic life are expected to be P10,000,000. The pattern of future sales cannot be measured reliably. On December 31, 2021, the software had a net realizable value of P4,500,000. What is the carrying amount of the computer software on December 31, 2021?
QUESTION 1: Westjet Limited is considering building a new manufacturing plant to produce wjets on the land it bought 10 years ago for $5,000,000. The land is currently appraised at 15,000,000. The construction cost of the plant will be $50,000,000. The following market data on the Westjet Limited is current: Common Stock: 2,000,000 shares, selling for $100 each; the beta is 1.5 Debt: 100,000 7% annual coupon bonds, 20 years to maturity, selling for 111.47% of par value. The bonds have $1000 par value each. 1,000,000 shares of 3.5% preferred stock outstanding, selling for $70 per share. Par value is $100 each. Preferred Stock: Expected return on the market 8%, the risk free rate of return is 3%, and the corporate tax rate is 40%. An initial investment of $10,000,000 in net working capital is required. a. Determine the weighted average cost of capital. b. The plant will have 25 years life, will be depreciated straight line, and will have zero salvage value after 25 year. Land will be…
Current Attempt in Progress On December 31, 2025, Novak Company acquired a computer from Plato Corporation by issuing a $576,000.00 zero-interest-bearing note, payable in full on December 31, 2029. Novak Company's credit rating permits it to borrow funds from its several lines of credit at 12%. The computer is expected to have a 5-year life and a $77,000 salvage value. Click here to view factor tables. (a) Your answer is partially correct. Prepare the journal entry for the purchase on December 31, 2025. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 2 decimal places, e.g. 58,971.23. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date December 31, 2025 Account Titles and Explanation Equipment Discount on Notes Payable Notes Payable Debit…

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