Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 4, Problem 4.5WUE
Learning Goal 5
E4-5 Rimier Corp.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
MVV has the following data on its 2020 financial statement
Total sales
2,000,000
Profit
360,000
Beginning total sales
Ending total sales
1,500,000
2,100,000
What is the Return on Investment (ROI) of the MVV?
III. COST ANALYSIS
Homework- Cost vs Benefit Analysis
Sam has a plan of a new product investment. Investment is 3m$. Discount rate is 4%. Forecast as following.
(growth rate of revenue and expenses grow is 5% every year)
How much is NPV? IRR? How long is the payback year?
Discount rate
Expressed in k CNY
Year
Investment
Cash in (revenue)
Cash out (Daily expenses)
7%
0
-3,000.0
1
680.0
-250.0
2
3
4
5
714.0 749.7 787.2 826.5
-262.5 -275.6 -289.4 -303.9
6
7
867.9 911.3
-319.1 -335.0
8
9
956.8 1,004.7
-351.8 -369.4
s
10
1,054.9
-387.8
Nikul
Chapter 4 Solutions
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Ch. 4.1 - Prob. 4.1RQCh. 4.1 - Prob. 4.2RQCh. 4.2 - Briefly describe the first four modified...Ch. 4.2 - Describe the overall cash flow through the firm in...Ch. 4.2 - Prob. 4.5RQCh. 4.2 - 4-B Why is depreciation (as well as amortization...Ch. 4.2 - Prob. 4.7RQCh. 4.2 - Prob. 4.8RQCh. 4.2 - Prob. 4.9RQCh. 4.3 - Prob. 4.10RQ
Ch. 4.3 - Prob. 4.11RQCh. 4.3 - Prob. 4.12RQCh. 4.3 - What is the cause of uncertainty in the cash...Ch. 4.4 - Prob. 4.14RQCh. 4.5 - Prob. 4.15RQCh. 4.5 - Prob. 4.16RQCh. 4.6 - Prob. 4.17RQCh. 4.6 - What is the significance of the plug figure,...Ch. 4.7 - Prob. 4.19RQCh. 4.7 - Prob. 4.20RQCh. 4 - Opener-in-Review The chapter opener described a...Ch. 4 - Learning Goals 2, 3 ST4-1 Depreciation and cash...Ch. 4 - Prob. 4.2STPCh. 4 - Prob. 4.3STPCh. 4 - Prob. 4.1WUECh. 4 - Prob. 4.2WUECh. 4 - Learning Goal 3 E4-3 Determine the operating cash...Ch. 4 - Prob. 4.4WUECh. 4 - Learning Goal 5 E4-5 Rimier Corp. forecasts sales...Ch. 4 - Prob. 4.1PCh. 4 - Learning Goal 2 P4-2 Depreciation In early 2019,...Ch. 4 - Prob. 4.3PCh. 4 - Learning Goals 2, 3 P4-4 Depreciation and...Ch. 4 - Learning Goal 3 P4-5 Classifying inflows and...Ch. 4 - Prob. 4.6PCh. 4 - Learning Goal 4 P4-8 Cash receipts A firm has...Ch. 4 - Learning Goal 4 P4-9 Cash disbursements schedule...Ch. 4 - Learning Goal 4 P4-10 Cash budget: Basic Grenoble...Ch. 4 - Prob. 4.11PCh. 4 - Learning Goal 4 P4-12 Cash budget: Advanced The...Ch. 4 - Prob. 4.13PCh. 4 - Prob. 4.14PCh. 4 - Learning Goal 4 P4-15 Multiple cash budgets:...Ch. 4 - Learning Goal 5 P4-16 Pro forma income statement...Ch. 4 - Learning Goal 5 P4-17 Pro forma income statement:...Ch. 4 - Learning Goal 5 P4-18 Pro forma balance sheet:...Ch. 4 - Learning Goal 5 P4-19 Pro forma balance sheet...Ch. 4 - Learning Goal 5 P4-20 Integrative: Pro forma...Ch. 4 - Learning Goal 5 P4-21 Integrative: Pro forma...Ch. 4 - Prob. 4.22PCh. 4 - Prob. 1SE
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
- Please help me with all answers I will give upvote thankuarrow_forwardFor this year 2020, Dulce Candies expects a 15% increase from 2019 sales of P75,000. It hopes to maintain cost of sales ratio at 32%; and marketing and administrative expenses at 8% of sales. Based on these assumptions, 8. Amount of sales for year 2020 should be a) P11,250 | b) P24,000 c) P86,250 d) P105,000 9. Cost of sales at that volume is expected to be b) P63,750 a) P24,000 10. Marketing and administrative expenses should be around P99,000 d) P105,000 a) P75,000 b) P32,000 P11,250 d) P6,000arrow_forwardPrepare a projected statement of comprehensive income for the year ended 31 December 2021 to determine the sales needed to produce a profit after tax that is 25% more than that for the year ending 31 December 2020.(Where applicable round of amounts to the nearest rand) INFORMATION:Calder EnterprisesStatement of Comprehensive Income for the year ended 31 December 2020 Additional information:1. Cost of sales is expected to be 60% of sales.2. Operating expenses will increase by 4%.3. Interest expense will increase to R120 000.4. The tax rate will remain at 28%3.2 Use the information from question 3.1 (not your solution) and calculate the following for the year ending 31 December 2020:3.2.1 Gross margin 3.2.2 Net profit margin 3.2.3 Operating margin 3.2.4 Interest coveragearrow_forward
- Payback period and discounted payback period (using 5% rate of return) Initial Investment is 300,000 Net Income July 36,000 August 12,300 September 21,000 October 9,600 November 17,650 December 61,500arrow_forwardThe following table presents sales forecasts for Golden Gelt Giftware. The unit price is $30. The unit cost of the giftware is $25. Year Unit Sales 20, 000 2. 31, 200 14, 900 5, 700 Thereafter It is expected that net working capital will amount to 25% of sales in the following year. For example, the store will need an initial (year 0) investment in working capital of 0.25 x 20,000 x $30 = $150,000. Plant and equipment necessary to establish the giftware business will require an additional investment of $197,000. This investment will be depreciated in an asset class with a CCA rate of 25%. We will assume that the firm has other assets in this asset class. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 35%. The discount rate is 10%. What is the net present value of the project? (Round your answer to the nearest whole dollar amount.) NPV $arrow_forwardThe following table presents sales forecasts for Golden Gelt Giftware. The unit price is $30. The unit cost of the giftware is $10. Unit Sales Year 1 3 Thereafter 24,000 32,000 16,000 7,000 0 It is expected that net working capital will amount to 30% of sales in the following year For example, the store will need an initial (Year) 0) investment in working capital of 30 24,000 $30-$216,000. Plant and equipment necessary to establish the giftware business will require an additional investment of $202,000. This investment will be depreciated using MACRS and a 3-year life. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 21% What is the net present value of the project? The discount rate is 12%. Use the MACRS depreciation schedule. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Net present valuearrow_forward
- Data are as follows: In year 2020, sales are 150,000 units with Selling price per unit of 10 and VC per unit iof 6.50 per unit. Fixed cost is 155,000 and Interest cost is 90,000. Q3. Assume that the company expects to have sales increase by 20%, what will be the resulting change in EBIT in year 2021? choices: • 33.33% • 26.45% • 25% • 28.38%arrow_forwardThe following table presents sales forecasts for Golden Gelt Giftware. The unit price is $40. The unit cost of the giftware is $25. Year 1 2 3 4 Thereafter Unit Sales 22,000 30,000 14,000 5,000 0 It is expected that net working capital will amount to 20% of sales in the following year. For example, the store will need an initial (Year 0) investment in working capital of 0.20 x 22,000 x $40 = $176,000. Plant and equipment necessary to establish the giftware business will require an additional investment of $200,000. This investment will be depreciated straight-line over 3 years. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 30%. The discount rate is 20%. Use the MACRS depreciation schedule. a. What is the net present value of the project? Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. b. By how much does NPV increase if the firm takes immediate 100% bonus depreciation? a. Net present…arrow_forwardVijayarrow_forward
- Assume that next year, management wants the company to earn a minimum profit of $ 500,000. How many units will have to sold to meet this target profit figure?arrow_forwardThe following table presents sales forecasts for Golden Gelt Giftware. The unit price is $40. The unit cost of the giftware is $25. Year 1 2 3 4 Thereafter Unit Sales 22,000 30,000 14,000 5,000 0 It is expected that net working capital will amount to 20% of sales in the following year. For example, the store will need an initial (Year O) investment in working capital of 0.20 x 22,000 $40 = $176,000. Plant and equipment necessary to establish the giftware business will require an additional investment of $200,000. This investment will be depreciated straight-line over 3 years. After 4 years, the equipment will have an economic and book value of zero. The firm's tax rate is 30%. The discount rate is 20% . Use the MACRS depreciation schedule. a. What is the net present value of the project? Note: Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. b. By how much does NPV increase if the firm takes immediate 100% bonus depreciation? a. Net present…arrow_forwardThe following table presents sales forecasts for Golden Gelt Giftware. The unit price is $40. The unit cost of the giftware is $25. Year 1 2 3 4 Thereafter Unit Sales 22,000 30,000 14,000 5,000 8 It is expected that net working capital will amount to 20% of sales in the following year. For example, the store will need an initial (Year 0) Investment in working capital of 0.20 x 22,000 × $40 = $176,000. Plant and equipment necessary to establish the giftware business will require an additional Investment of $200,000. This Investment will be depreciated straight-line over 3 years. The firm's tax rate is 30%. The discount rate is 20%. a. What is the net present value of the project? Note: Do not round Intermediate calculations. Round your answer to the nearest whole dollar amount. b. By how much does NPV Increase if the firm takes Immediate 100% bonus depreciation? a. Net present value b. Increase in NPVarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Why do we need accounting?; Author: EconClips;https://www.youtube.com/watch?v=weCXE2wIl90;License: Standard Youtube License