Cost (£)205,000200,000195,000190,000185,000180,000175,000170,000165,000160,000155,000150,000145,000140,000135,000130,000125,000120,000120,000.56Year 1135,000.98Year 2145,000.21Year 3200,000.65Year4 Your manager has sent you the expenditure spent on vehicle repairs for the last four years.Based on the data provided, what was the % increase in cost from year 2 to year 4?

48.15%Explanation:From the given curve, the cost are,For Year 2 it is $135,000.98For Year 4 it is…

Answered: Cost (£) 205,000 200,000 195,000…

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

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Clarita Contracting builds roads, tunnels, bridges, and other transportation infrastructure. The following are the budgeted costs and time (months) to a given stage of completion for a project to upgrade a bridge to current standards. The project was originally estimated to take 25 months to complete. Also presented are the actual results through the first 11 months of the project. Percentage Complete 0% 4% 8% 12% 16% 20% 24% 28% 32% 36% 40% 44% 48% 52% 56% 60% 64% 68% 72% 76% 80% 84% 88% 92% 96% 100% Cost ($000) Budget 0 213 471 775 1,125 1,520 1,961 2,447 2,979 3,557 4,180 4,849 5,563 6,323 7,129 7,980 8,877 9,819 10,807 11,841 12,920 14,045 15,215 16,431 17,693 19,000 Actual 0 112 266 464 706 990 1,317 1,688 2,102 2,559 3,059 3,063 4,189 4,819 Months to Reach Budget Actual 0 5 7 8 9 10 11 12 13 14 14 15 16 17 18 18 19 20 20 21 22 22 23 24 24 25 0 1 1 2 3 4 4 5 6 7 8 9 10 11
Year 0 2 Project A -$50,000 $24,200 $16,800 $46,500 Project B -$45,000 $39,000 $18,000 $18,000 Assume these projects are mutually exclusive and the cost of capital is 12.6%. Which of the following statements are true? A. The payback period of project A is 2.19 years. B. You'll accept project A since its NPV is about $872.85 greater than that of project B. C. You'll accept project B since its payback period is shorter than project A. D. Both (A) and (B) are true. E. Both (A) and (C) are true.
Show formula used.
Given the following figures - what is closing capital? Opening Capital £250,000 Net Profit £32,000 Drawings £25,000 Select one £193,000 £257,000 £307,000 £243,000
A4 9b A4 9a We find the following information on NPNG (No-Pain-No-Gain) Inc.: EBIT = $2,000,000Depreciation = $250,000Change in net working capital = $100,000Net capital spending = $300,000 These numbers are projected to increase at the following supernormal rates for the next three years, and 5% after the third year for the foreseeable future: EBIT: 20%Depreciation: 10%Change in net working capital: 15%Net capital spending: 10% The firm’s tax rate is 35%, and it has 1,000,000 outstanding shares and $8,000,000 in debt. We have estimated the WACC to be 15%. b. Calculate the CFA* for each of the next four years, using the formula CFA* = EBIT(1 – T) + Depr – ΔNWC – NCS.
Clearcast Communications Inc. is considering allocating a limited amount of capital investment funds among four proposals. The amount of proposed investment, estimated operating income, and net cash flow for each proposal are as follows: Operating Income Net Cash Flow Investment Year Proposal A: $450,000 $ 30,000 1 $120,000 2 30,000 120,000 3 20,000 110,000 4 10,000 100,000 (30,000) $ 60,000 $ 60,000 40,000 60,000 $510,000 $100,000 Proposal B: $200,000 1 80,000 3 20,000 60,000 4 (10,000) 30,000 (20.000) $ 90,000 20.000 $290,000 (Continued)
Using discount rate 20% the project should be rejected or accepted
Q29 Consider the following costs associated with all work packages (WP A and WP B) of a project: WP A B Labor hours Type 1 30 5 Labor hours Type 2 30 20 Labor hours Type 3 10 60 The rate of Labour hours Type 1 is $15. The rate of Labour hours Type 2 is $25. The rate of Labour hours Type 3 is $35. Calculate the total cost of the project. Material Equipment $500 $200 $100 $1,000 Subcontracts $8000 $2000 Other $300 $400
2019 2020Sales price per unit R15 R19Variable cost per unit R6 R7Fixed cost (FC) per annum R650 000 R 855 500Fixed cost per unit R3 R4 Current assets R450 600 R560 700Current liabilities R510 000 R780 000Retained profit R21 809 R17 600Net Sales R2 900 320 R 3 100 100Cost of sales R390 000 R475 000 Q.5.1 a. Calculate the break-even point for Pearson & Litt for 2019 and 2020.b. Compare the results of the 2019 and 2020 break-even points and explain why there might be a difference. Q.5.2 a. Calculate the current ratio for Pearson & Litt for 2019.b. Explain the results of the current-test ratio.Q.5.3 a. Calculate the gross profit margin for Pearson & Litt for 2020 b. Explain the results of the gross profit margin calculation. Q.5.4 a. Differentiate between traditional budgeting and zero-base budgeting.b. Recommend one of these budgeting methods to Pearson & Litt and provide reasons for your recommendation
QUESTION 5Read the information below and answer the following questionsINFORMATIONThe management of Mastiff Enterprises has a choice between two projects viz. Project Cos and Project Tan, each ofwhich requires an initial investment of R2 500 000. The following information is presented to you:PROJECT COS PROJECT TANNet Profit Net ProfitYear R R1 130 000 80 0002 130 000 180 0003 130 000 120 0004 130 000 220 0005 130 000 50 000A scrap value of R100 000 is expected for Project Tan only. The required rate of return is 15%. Depreciation is calculated using the straight-line method.5.4 Benefit Cost Ratio of Project Cos (expressed to three decimal places). 5.5 Internal Rate of Return of Project Cos (expressed to two decimal places) USING INTERPOLATION.
2019 2020 sale price per unit R15 R19 Variable cost per unit R16 R7 Fixed cost(FC) per annum R650 000 R855 500 Fixed cost per unit R3 R4 Current assets R450 600 R560 700 Current liabilities R510 000 R780 000 Retained profit R21 809 R17 600 Net sales R2900 320 R3 100 100 Cost of sales R390 000 R475 000 Q.5.1.1 Calculate the break‐even point for Pearson & Litt for 2019 and 2020
Question 2 The following information relates to three possible capital expenditure projects. Because of capital rationing, only one project can be accepted: Project Q P R Initial cost £250,000 £210,000 £190,000 4 5 £17,500 £12,000 £ £ End of year 175,000 90,000 60,000 70,000 70,000 65,000 3 65,000 55,000 70,000 4 60,000 80,000 75,000 5 55,000 80000 The company estimates its cost of capital is 14 per cent. Required: Calculate a) The payback period for each project. b) The accounting rate of return for each project. c) The net present value of each proiect. d) Which project should be accepted - give reasons. e) Explain the factors management would need to consider, in addition to the financial factors, before making a final decision on a project. Expected life (years) 5 Scrap value expected £20,000 Expected cash inflows £ 2

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