Then, find the NPV of the new investment. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 2 decimal places eg. 5,125.36. Enter negative amounts using either a negative sign preceding the number, e.g.-5,125,36 or parentheses, e.g. (5,125,36).) Click here to view the factor table. NPV 2152.08
Q: Gifts For All has projected sales for next year of: Q1 Q2 Q3 Q4 Sales S 26,000 S $23,473 $20,640…
A: The accounts payable period is the number of days it takes for a company to pay its supplies. Here,…
Q: (Present value of annuities and complex cash flows)
A: Here,cash flow for 5 years is $19,000discount rate (r) is 23%time-period (n) is 5 yearsThe Present…
Q: You are offered an annuity that will pay $14,000 per year for 13 years (the first payment will be…
A: An annuity refers to a series of periodic payments made in exchange for a lump sum payment.…
Q: Suppose the market portfolio has an expected return of 10% and a volatility of 20%, while…
A: CAPM stands for the Capital Asset Pricing Model. It is a financial model used to determine the…
Q: Juan invested $22,000 in a mutual fund 4 yr ago. Today his investment is worth $28,838. Find the…
A: Present Value = pv = $22,000Time = t = 4 YearsFuture Value = fv = $28,838
Q: Your paycheck is $235. How much money do you put in your savings account?
A: When salary is received there are many expenses but there is need of savings for the future to save…
Q: The price of your e-Book reader in the U.S. is $100, so for how much would you sell it in Serbia?
A: We can determine the price of e-book in Serbia using the formula below:
Q: If Elizabeth co. believes that an 0.7 percent default risk premium, an 0.2 percent liquidity…
A: A measure of the return an investor might anticipate from investing in commercial paper is the yield…
Q: A firm has two classes of securities: long-term bonds and common stock. The bonds have 16 years to…
A: Value of debt = d = $749 millionNumber of Stock = n = 31 millionMarket price of stock = ps = $26
Q: Answer is complete but not entirely correct. 4,972.00 EFN
A: We can determine the external funds needed using the formula below:
Q: Graham & Sons wishes to evaluate a proposed merger into the RCN Group. Graham had 2019 earnings of…
A: a. The earnings per share is calculated byCalculation of the expected earnings per share for Graham…
Q: Synovec Company is growing quickly. Dividends are expected to grow at a rate of 18 percent for the…
A: Growth rate for First 3 Year = g3 = 18%Growth rate after 3 years = g = 3%Required Rate of Return = r…
Q: Quantitatively, what is the relationship between the AGI phase-out thresholds for the $2,000 child…
A: For 2020, eligible taxpayers can claim a tax credit of $2,000 per qualifying dependent child under…
Q: Consider a portfolio manager with a $20,500,000 equity portfolio under management. The manager…
A: Variables in the question:Portfolio value = $20,500,000Portfolio beta = 1.25Future price =…
Q: The Treasury Department auctioned $11 billion in 3-month bills in denominations of $10,000 at a…
A: Compound = n = 3 month = Quarterly = 4Discount Rate = r = 3.15%
Q: Richard has two investment opportunities. He can invest in The Sunglasses Company or The Umbrella…
A: Expected return of sunglasses company 13+24/2=18.5Expected return of umbrella company…
Q: A town would like to build a new recreation center in 16 years. They predict they will need $18…
A: An annuity is a phenomenon of where a financial goal is reached by investing a small amount on a…
Q: pany Z-prime’s earnings and dividends per share are expected to grow by 3% a year. Its growth will…
A: We will use the dividend discount model approach here.As per the dividend discount model the price…
Q: You want to have $10,500 saved 8 years from now. How much less can you deposit today to reach this…
A: A = whereA = Amount to be deposited todayFV = future valuer = interest raten = time period
Q: b. The expected post-merger EPS in year 2020 for Graham's stockholders on each of their original…
A: (b)The expected post-merger EPS for Graham's stockholders on each of their original shares of…
Q: (Bond valuation relationships) Stanley, Inc. issues 15-year $1,000 bonds that pay $95 annually. The…
A: Here,Particulars YTM 8%YTM 13%YTM 6%Par value of Bond (FV)$1,000$1,000$1,000Coupon payment…
Q: You need to solve this exercise using Excel functions. (Please show work on excel) ABC Inc. plans…
A: NPV is also known as Net Present Value . It is a capital budgeting tehcnique which helps in decision…
Q: The correlation of returns between Microsoft and Apple is 0.2765. The standard deviation of the…
A: Co-Variance a measure of the relationship between two random variables. It measures the directional…
Q: . What to the nearest cent is the value of the long forward contract?
A: A financial agreement between two parties to purchase or sell an asset at a defined future date for…
Q: Kristjan borrowed 140 000 from a bank 4 years ago. The annual interest rate was 6.6% at the time and…
A: Here,Loan Amount $ 140,000.00Interest Rate6.60%Time Period in years12Refinancing Interest…
Q: Find the present value of an annuity with annual payments of $1,100.00 compounded at the end of each…
A: Annual Payment = p = $1100Number of Payment = n = 8Time for first payment = t = 3Interest Rate = r =…
Q: John will need to make an initial deposit of $ to reach his goal of 1 million
A: Using a financial calculator, we can determine the amount that needs to be saved today to have…
Q: novec Company is growing quickly, Dividends are expected to grow at a rate of 22 sercent for the…
A: According to the DDM dividend discount model the value of a stock is the present value of dividends…
Q: Bond value and time-Constant required returns Pecos Manufacturing has just issued a 15-year, 12%…
A: Bonds are debt instruments issued by companies. The company which issues bonds pays coupons or…
Q: Last year Ross Inc. had sales of $330,000 and a net income of $20,000, and its year-end assets were…
A: GivenTotal assets = 250000Debt to Assets ratio = 40.00%Total Equity = Total Assets * ( 1 -…
Q: Which is the better return for the investor on an after-tax basis? Please answer either corporate or…
A: Corporate bonds are taxable but Municipal bonds are not.Corporate bonds are currently yielding…
Q: -year mortgage is amortized by making paym nths. If interest is 8.45% compounded annually tgage…
A: Mortgage loans make home buying quite easy and convenient and mortgage loans are paid by equal…
Q: 34. Firm B's one million shares of stock currently sell for $20 each. Firm A estimates the economic…
A: Stock market:The stock market refers to a platform where individuals and institutions can buy and…
Q: A Japanese company has a bond that sells for 103.813 percent of its ¥100,000 par value. The bond has…
A: Yield to maturity considers the coupon payment along with the price of the bond. Yield to maturity…
Q: 1) Assume you deposited $1,000 in a bank that offered you 10% annual interest rate. If you kept your…
A: Future value of the money is the amount of money that was deposited and amount of compounding…
Q: Standard deviation of the portfolio with stock A is%. (Round to two decimal places.)
A: The standard deviation measure the risk and uncertainty about the project. It also measures the…
Q: When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers om her grave every…
A: The time value of money is the financial concept that is used in various financial analyses for…
Q: What is the present value of 8 receipts of $3,160 each received at the beginning of each period,…
A: Present Value is a capital budegting tehcniques. It shows the current value of future benefits at…
Q: Determine the (after-tax) percentage cost of a $50 million debt issue that the Mattingly Corporation…
A: We can determine the after tax cost of debt using the formula below:Interest used to service debt…
Q: You find the following corporate bond quotes. To calculate the number of years until maturity,…
A: Yield to maturity is the total return an investor has earned by holding the bond until its maturity.…
Q: what is maintenance costs each year (from year 1 to year 5). ...
A: We can determine the maintenance costs per year using the formula below:Maintenance cost from year 2…
Q: A GM and a Ford bond both have 4 years to maturity, a $1,000 par value, a BB rating and pay interest…
A: The yield to maturity is the total return an investor earned by holding the bond until the maturity.…
Q: (Size-disparity problem) The D. Dorner Farms Corporation is considering purchasing one of two…
A: The capital budgeting is a method of determining the acceptability of a project with respect to its…
Q: Please calculate the forward rate between the two given spot rates. (ex: if you have a 1y spot and a…
A: The spot rate in year 1 is 3.1%.The spot rate in year 10 is 5.7%.The forward rate to be calculated…
Q: Craig's Cake Company has an outstanding issue of 13-year convertible bonds with a $800 par value.…
A: Given data:-Face value = $800Maturity = 13Annual coupon = 12%Convertible into shares = 70Interest…
Q: You have taken out a 60-month, $26,000 car loan with an APR of 4%, compounded monthly. The monthly…
A: Loan Amortization Schedule gives the information of your loan and how you'll repay it. The payment…
Q: 3. McCaffrey's Inc. has never paid a dividend, and when the firm might begin paying dividends is not…
A: According to bartleby guidelines , if question involves multiple sub parts , then 1st sub 3 parts…
Q: Using expected cash flow and present value techniques, determine the value of the warranty liability…
A: Warranty liability pertains to the anticipated costs associated with warranties for products and…
Q: You are planning to make monthly deposits of $370 into a retirement account that pays 9 percent…
A: Compound = monthly = 12Monthly Deposit = d = $370Interest Rate = r = 9 / 12 = 0.75%Time = t = 35 *…
Q: Tiger Woods was paid a $10 million advance to write a book, which took him one year to write.…
A: NPV is the difference between present value of cash flow and initial investment and it should be…
Trending now
This is a popular solution!
Step by step
Solved in 6 steps with 10 images
- Sunland Corp is planning to replace an old asset with new equipment that will operate more efficiently. May be relevant to this analysis. Cost about asset $13,000. Book value of old asset $1800. Selling price of an old asset $1800. Purchase price of new replacement asset $20,000. Estimated salvage value of new asset $2100. Estimated useful life of new asset at five years. estimated annual net operating cash inflows $3000 per year for five years. discount rate 10%. Tax rate 20%. Determine which amounts listed are relevant cash flows for Sunland Corp. considers this asset sale and replacement. What is the cost of old asset? What is the book value of old asset? Selling price of old asset? Purchasing price of new replacement asset? Estimated salvage value of new asset? Estimated annual net operating cash flows? Then find the NPV of the new investment. What is the NPV ? this is all one questionSheridan Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided here. Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Net present value Machine A $78,200 8 years Profitability index 0 $19,800 $5,130 Click here to view the factor table. Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). Round answer for present value to 0 decimal places, e.g. 125 and profitability index to 2 decimal places, eg. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Machine A Machine B $182,000 8 years $39,600 $10,180 Machine BCalculate the NPV of an asset replacement given the following information: Investment = $180,000; salvage recovered now = $70,000; operating cash flows = $180,000; PV of salvage forgone = $5,500; PV of salvage recovered = $14,000; CCATS = $35,000. Multiple Choice $119,500 $121,500 $115,500 $113,500 $117,500
- Crane Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided here. Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Click here to view PV table. Net present value Machine A Profitability index $75,700 8 years 0 $20,300 $4,870 Machine A Machine B $182,000- 8 years Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). Round answer for present value to 0 decimal places, e.g. 125 and profitability index to 2 decimal places, e.g. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) 0 $39,700 $10,050 Machine BQuary Company is considering an investment in machinery with the following information. Initial investment Useful life Salvage value Expected sales per year (a) Compute the investment's annual income and annual net cash flow. (b) Compute the investment's payback period. Required A Required B Complete this question by entering your answers in the tabs below. $ 335,000 9 years $ 20,000 16,750 units Annual Amounts Materials, labor, and overhead (except depreciation) Depreciation-Machinery Selling, general, and administrative expenses Selling price per unit Compute the investment's annual income and annual net cash flow. Expenses Income Net cash flow $ 75,375 35,000 8,375 $ 10Shamrock Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Cost Old Equipment Accumulated depreciation Remaining life Current salvage value Salvage value in 8 years Annual cash operating costs $80,640 $40.600 8 years $10,400 $0 $35,100 New Equipment Cost Estimated useful life Salvage value in 8 years Annual cash operating costs $39,000 8 years $4,600 $29.900 Depreciation is $10,080 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4,600.
- What is the initial book value of a new piece of equipment given the following information? Note that not all items may be needed: Purchase price of new equipment is $113, Shipping cost of the new equipment is $6,000 Salvage value of old equipment being replaced is $51,000 Expected salvage value of the new equipment for depreciation purposes is $34,000 Installation cost for the new equipment is $13,000 Tax rate is 31%The following data concern an investment project (Ignore income taxes.): Investment in equipment Annual net cash inflows $ 215,000 $ 56,000 $ 70,700 $ 27,000 Salvage value of the equipment Working capital required Life of the project Required rate of return 5 years Net present value 12% The working capital will be released for use elsewhere at the conclusion of the project. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Required: Compute the project's net present value. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount.Quary Company is considering an investment in machinery with the following information. Initial investment Useful life Materials, labor, and overhead (except depreciation) Depreciation-Machinery $ 254,000 9 years Salvage value Expected sales per year $ 20,000 12,700 units Selling, general, and administrative expenses Selling price per unit $ 57,150 26,000 6,350 $ 10 (a) Compute the investment's annual income and annual net cash flow. (b) Compute the investment's payback period. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute the investment's annual income and annual net cash flow. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Selling, general, and administrative expenses Depreciation-Machinery Income Net cash flow Income Cash Flow $ 127,000 (57,150) (6,350) (26,000) $ 89,500 $ 127,000
- BAK Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided here Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine A $75,500 8 years 0 Net present value Profitability index $20,000 $5,000 Click here to view PV table. Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses es (45). Round answer for present value to 0 decimal places, eg. 125 and profitability index to 2 decimal places, eg. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Machine A Which machine should be purchased? Machine A should be purchased Machine B $180,000 8 years 0 $40,000 $10,000 Machine B…The Xenia Corporation is considering replacing one of its hand-operated assembly machines with a new fully automated machine. Based on the information given in the following table determine the cash flows associated with this replacement Keep Machine operator Maintenance cost Cost of defects Depreciable value of old machine Depreciation Expected life Age Salvage value in 5 years Current salvage value Tax rate $25,000 per year $2000 per year $6000 $50,000 $5000 per year 10 years 5 years old Zero $5000 34 percent Replace Cost of new machine Installation fee Transportation charge Maintenance cost Expected life Salvage value Depreciation method $60,000 $3,000 $3,000 $3,000 per year 5 years $20,000 Straight-lineCrane Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided here. Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Net present value Machine A $77,000 8 years 0 Profitability index $19,900 $4,800 Machine A Which machine should be purchased? Click here to view the factor table. Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. (If the net present value is negative. use either a negative sign preceding the number eg -45 or parentheses eg (45). Round answer for present value to 0 decimal places, e.g. 125 and profitability index to 2 decimal places, e.g. 10.50. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Machine B should be purchased. $188,000 8 years 0 $40,200 $9,860…