Showing 1639–1647 of 1959 results
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Tensaw Chemical plans Investment Decision Analysis
$1.00Text: Tensaw Chemical plans to invest $200,000 and has identified the following three investments. Investment A requires an initial investment of $ 120,000 and has an annual rate of return of 18%. Investment B an initial investment of $80,000 and has an annual rate of return of 22%. Investment C requires an initial investment of $20,000 and has an annual rate of return of 35%. Any unused funds require deposit in a bank account with an annual percentage yield of 6%. Tensaw Chemical may invest in each of the investments only once. All of the investments have a one-year life.
Using rate of return analysis determine which alternative Tensaw Chemical should choose.
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Capital Investment Analysis
$1.00
Text: Computation of payback period, accounting rate of return, and net present value Concorde Company is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $100,000 cost with an expected five-year life and a $ 25,000 salvage value. All sales are for cash and all costs are out of pocket, except for depreciation on the new machine. Additional information includes the following. Required 1. Compute straight-line depreciation for each year of this new machine’s life. (Round depreciation amounts to the nearest dollar.) 2. Determine expected net income and net cash flow for each year of this machine’s life. (Round answers to the nearest dollar.) 3. Compute this machines payback period, assuming that cash flows occur evenly throughout each year. (Round the payback period to two decimals.) 4. Compute this machine’s accounting rate of return, assuming that income is earned evenly throughout each year. (Round the percentage return to two decimals.) 5. Compute the net present value for this machine using a discount rate of 12% and assuming that cash flows occur at each year-end. (Hint: Salvage value is a cash inflow at the end of the asset’s life.)
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Consumers became more future oriented and thus decided to save more
$1.00Question:
investment and real interest rate
After the recession, consumers became more future oriented and thus decided to save more. Use the saving-investment analysis to analyze the effects of this change on investment and real interest rate.
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Cash flow: Which project or projects you should undertake based on PW analysis
$1.00
Text: Consider the following sets of independent investment projects with three – year investment life: Which project or projects you should undertake based on PW analysis? Assume MARR 15%.
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Sunshine Food Company Case: Divisional Income Statements and Rate of Return on Investment Analysis
$1.00Sunshine Food Company is a diversified food company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 2014, are as follows:
Cereal
DivisionSnack Cake
DivisionRetail
Bakeries
DivisionSales $ 5,520,000 $ 5,900,000 $5,330,000 Cost of goods sold 3,370,000 3,660,000 3,140,000 Operating expenses 1,156,400 942,000 804,200 Invested assets 6,900,000 5,900,000 4,100,000 The management of Sunshine Food Company is evaluating each division as a basis for planning a future expansion of operations.
Required:
1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges.
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Brodigan Corporation: Net Present Value
$1.00
Text: Brodigan Corporation has provided the following information concerning a capital budgeting project: Investment required �n equipment Net annual operating cash inflow After-tax discount rate The expected life of the project and the equipment is 3 years and the equipment has zero salvage value. The company uses straight-line depreciation on all equipment and the depreciation expense on the equipment would be dollar150,000 per year. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting. The net annual operating cash inflow is the difference between the incremental sales revenue and incremental cash operating expenses. Required: Determine the net present value of the project. Show your work!
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Haliburton Inc. Case
$5.00
Text: Haliburton, Inc. is considering two projects with the following cash flows. Haliburton uses the payback period method of capital budgeting and accepts only projects with payback periods of 3 years or less. a. If the projects are presented as standalone opportunities which one(s) would Haliburton accept? If they were mutually exclusive and Haliburton disregarded its three year rule, which project would be chosen? b. Is there a flaw in the thinking behind the correct answers to part a?
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Firm’s cost of capital
$1.00The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firm?s beta is t6& The rate on six-month T-buts is 169%, and the return on the S&P 500 index is 5.29%. What is the appropriate cost for retained earnings in determining the firm’s cost of capital? Round the answers to two decimal places in percentage form. (Write the percentage sign in the units box).
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Calculate NPV for the following capital budgeting proposal
$1.00Calculate the NPV for the following capital budgeting proposal: $100,000 initial cost, to be depreciated straight-line over five years to an expected salvage value of $5,000, 35% tax rate, $45,000 additional annual revenues, $15,000 additional annual expense, $8,000 additional investment in working capital, 11% cost of capital.
