Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Problem-
Propfix Ltd. is planning a major upgrade of their plant at a cost of $75,000. The original plant was commissioned three years ago at a cost of $100,000. The location of the premises is critical to Propfix Ltd's operation and is leased for $30,000 pa., paid at the start of each year. The landlord has given notice that the lease will terminate in exactly five years, and a payment of $50,000 to Propfix at this time to compensate them for the cost of improvements to the property was agreed to in the original lease terms. The plant will be scrapped as worthless.
The upgrade would permit Propfix to recondition 2000 propellers per year, an increase on the current 1500 per year, whilst at the same time reducing costs. The net revenue per propeller would therefore increase from the current $30 to $40 with the upgrade.All capital items, including the cost of the upgrade, can be depreciated for tax purposes over 10 years straight line. The tax rate is 30%, and 70% of franking credits are claimed by shareholders. Propfix requires a return of 15% pa after tax on its investments. Should they make the upgrade?
Additional information-
This problem related to Finance and this problem discuss about whether or not a company reconditioning propellers should make an upgrade.
A company is considering building a new and improved production facility for one of its existing products. Should the company build the new and improved production facility.
peppermint company has sales of 9 million per year all on credit terms calling for payment within 30 days and its
Mooradian Corporation's free cash flow during the just ended year (t=0) was $100 million, and the FCF is expected to grow at a constant rate of 5.0% in the future. If the weighted average cost of capital is 12.5%, what is the firm's value of opera..
Suppose today you buy a 12 percent annual coupon bond with a par value of $1000 and a market price of $1000. The bond has 13 years maturity. What is the coupon rate? what is the yield to maturity at the time of the purchase?
A. Assume the term structure instantaneously shifts from 12% to 17%. Compute the new price of the bonds. Assume ABC Capital Partners holds the bonds until maturity. Compute the holding period return for the bonds assuming the term structure rem..
Five brief articles to reference are found on the "Headlines" page of the menu for GE on YahooFinance. These articles were posted on Thursday, April 21, 2011 and Friday, April 22, 2011. Discuss and explain the process of capital budgeting.
Assume an asset price St follows the geometric Brownian motion, dSt = µStdt + σStdWt, where µ and σ are constants and r is the risk-free rate. 1. Using the Ito's Lemma find the stochastic differential equation satisfied by the process Xt = Stn , wher..
Hazardous Toys Corporation produces boomerangs that sell for $8 each and have a variable cost of $7.50. Fixed expenses are $15,000.
Jack and Jill have just had their first child. If college is expected to cost $15,000 per year in 18 years, how much should the couple begin depositing annually at the end of each year to accumulate enough funds to pay the first year's tuition at ..
cash flowsproject year0 1 2 3 4a -5000 1000 1000 3000 0b -1000 0 1000 2000 3000c -5000 1000 1000 3000 5000a. given that
fine breads inc. paid out 26000 common dividends during 2005 and it ended the year with 150000 of retained earnings.
Allocate the joint costs using the relative sales values. With these costs, what is the profit or loss associated with Copper?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd