Reference no: EM133253464
Celestila Moonn is looking at the capital budgeting analysis for her firm. Her firm, SchoolStreet, is considering at upgrading the firm's production capacity in an effort to improve the company's competitive position. Moonn estimates the discount rate for this Capital budgeting is 10%.
Moonn is being assisted by Amy Sun, an UMB MBA intern at SchoolStreet. Sun estimates that the new HP-450N2 copy machine will costs $370,000 and an additional $130,000 is needed for shipping and install it. The HP-450N2 will be depreciated straight-line to zero over a five-year life. The HP-450N2 will generate additional annual revenues of $285,000, and it will have annual cash operating expenses of $103,000. The HP-450N2 will be sold for $95,000 after five years. A current asset investment of $93,000 is required during the life of the investment. The corporate tax rate is 40%
Factor -1: Moonn noticed that interest expenses was not included in Sun's after-tax operating cash flow analysis and was wondering whether in her NPV or IRR calculation, the project's after-tax interest expenses should have been subtracted from the operating cash flows.
Factor -2: Moonn was not sure whether Sun's estimated depreciable lives of 5-year was correct and the straight-line depreciation method is appropriate for this project and was wondering what would have been the impact on NPV had Sun used 7-year depreciable lives and 5-MARCS depreciation schedule instead of 5-year straight-line method
Based on her estimates on new HP-450N2 copy machine, what was the initial investment?
- The incremental annual after-tax operating cash flow is closest to
- The fifth year's after-tax non-operating cash flow is closest to
- What is the project NPV
- With respect to Moon's concerns in Factor 1, the project's after-tax interest expenses should have been subtracted from the cash flows analysis
- With regards to Facto 2, had Sun used MACRS depreciation schedule in lieu of straight-line method
|
Propose three local businesses you would consider
: Propose three local businesses you would consider working with on your Senior Capstone Project. Make sure each of the three businesses meets above requirements
|
|
Should dress codes be implemented and enforced
: Should Dress Codes Be Implemented and Enforced? [1) Before reading: Create Hypothesis or Claim {can be changed after reading).
|
|
Limitations of seeking answers to organisational issues
: Explain to decision-makers in your organisation the imitations of seeking answers to organisational issues which may emerge because of having undertaken financi
|
|
What are some of the myths you have heard about stds
: Human Sexuality Psychology Question - What are some of the myths you have heard about STDs/STIs and why do you think people still believe them
|
|
Capital budgeting analysis for firm
: Celestila Moonn is looking at the capital budgeting analysis for her firm. Her firm, SchoolStreet, is considering at upgrading the firm's production capacity in
|
|
Identify appropriate outcome measures
: Identify appropriate outcome measures and study designs applicable to epidemiological sub-fields such as infectious disease, chronic disease
|
|
Create journal entries to record
: On July 15, 2021, Giles, Inc. purchases a debt security of Mavis Company for $8,000 as an available-for-sale debt security. On December 31, 2021, the investment
|
|
What is the journal entry
: When a company that mines platinum sells the metal for $575,000, what is the journal entry to show the sale and the cost of the sale if the platinum had a value
|
|
Producing financial statements for year one
: On January 1, Year One, Alba Company buys debt investments of Johnson and Johnson for $13,000. By the end of the year, the investment had risen in value to $16,
|