User Account

All Pages

Cash flow components that make up the relevant cash? flows

Assignment Help Financial Management
Reference no: EM131353028

Samuels Manufacturing is considering the purchase of a new machine to replace one it believes is obsolete. The firm has total current assets of $ 913 comma 000 and total current liabilities of $ 641 comma 000. As a result of the proposed? replacement, the following changes are anticipated in the levels of the current asset and current liability accounts noted. Account Change Accruals plus $ 36 comma 000 Marketable securities 0 Inventories negative 15 comma 000 Accounts payable plus 86 comma 000 Notes payable 0 Accounts receivable plus 148 comma 000 Cash plus 15 comma 000 a. Using the information? given, calculate any change in net working capital that is expected to result from the proposed replacement action. b. Explain why a change in these current accounts would be relevant in determining the initial investment for the proposed capital expenditure. c. Would the change in net working capital enter into any of the other cash flow components that make up the relevant cash? flows? Explain.

Reference no: EM131353028

Questions Cloud

Which wan solution is similar to replaced frame relay : ITNW 1358- Which WAN solution offers continuous and consistent bandwidth at all times of day and nights? Which WAN solution is similar to and has largely replaced frame relay?
Relationship between longer strands and younger cells : 1. What are the "strands" mentioned in the video? 2. Based on what you learned in this course, explain the relationship between longer "strands" and "younger cells".
Effect of the changes on organizational behavior : Determine the potential effect of the changes on organizational behavior within the closed campuses and the campuses that would remain open (at the time of the announcement). How do you think this change impacted organizational behavior within the..
How problematic are sentence fragments in your writing : Please respond at least 100 words: How problematic are sentence fragments in your writing? What else do you struggle with
Cash flow components that make up the relevant cash? flows : Samuels Manufacturing is considering the purchase of a new machine to replace one it believes is obsolete. The firm has total current assets of $ 913 comma 000 and total current liabilities of $ 641 comma 000. Would the change in net working capital ..
How broad or narrow do you think your topic should be : How broad or narrow do you think your topic should be? What might happen if the topic is too broad? Too narrow
About the reward-to-risk ratios : Reward-to-Risk Ratios. Stock Y has a beta of 1.50 and an expected return of 16 percent. Stock Z has a beta of .70 and an expected return of 11.5 percent. If the risk-free rate is 5.5 percent and the market risk premium is 8 percent, are these stocks ..
Problem regarding the phylum arthropoda : The Earth's largest phylum is Arthropoda, including centipedes, millipedes, crustaceans, and insects. The insects have shown to be a particularly successful class within the phylum. What biological characteristics have contributed to the success o..
Cross between two pea plants : Consider a cross between two pea plants with the following genotypes: YyPpRrLl x YYPprrll

Reviews

Write a Review

Financial Management Questions & Answers

  Build a time series model for the series

Consider the demand for electricity of a manufacturing sector in the United States. -Build a time series model for the series and use the fitted model to produce 1-step to 24-step ahead forecasts.

  Determine the deferred tax balance for 2004 and 2005

Determine the deferred tax balance for 2004 and 2005:- Machinery is depreciated on the straight-line basis over five years. It was acquired at the beginning of 2003.

  Calculate the cost of purchasing the equipment with debt

Reynolds Corporation plans to purchase equipment at a cost of $3 million. The company's tax-rate is 30 percent and the equipment's depreciation would be $600,000 per year for 5 years. If the company leased the asset on a 5-year lease, the payment wou..

  A project requires an initial investment

A project requires an initial investment of $200,000 and expects to produce a cash flow before taxes of 120,000 per year for two years (i.e., cash flows will occur at t = 1 and t = 2). The corporate tax rate is 30%. The assets will depreciate using t..

  Company will maintain this dividend for the next six years

Burkhardt Corp. pays a constant $13.90 dividend on its stock. The company will maintain this dividend for the next six years and will then cease paying dividends forever. If the required return on this stock is 11 percent, what is the current share p..

  Recapture of net working capital at the end of project

The recapture of net working capital at the end of a project will A. increase terminal year free cash flow by the change in net working capital times the corporate tax rate OR B. increase terminal year free cash flow OR C. decrease terminal year free..

  Compute the discounted payback statistic for project

Compute the Discounted Payback statistic for Project X and recommend whether the firm should accept or reject the project with the cash flows shown below if the appropriate cost of capital is 12 percent and the maximum allowable discounted payback is..

  Define what is the project''s net present value

The appropriate discount rate for this project is 10 percent. If the project has a 14 percent internal rate of return, what is the project's net present value?

  What are the proportions of debt and equity financing

B4. (Capital structure weights) The required return on debt (before taxes) is 7.5%, the required return on equity is 15%, and the cost of capital is 10%. If the marginal income tax rate is 40%, what are the proportions of debt and equity financing?

  Calculate npv and irr for investment-valuation problem

Initial investment = $1,000,000 machine, the project term is 6 years, sales for year 1 are estimated to be $1,000,000, and will grow by 7.5% per year through year 5, sales for year 6 = $500,000, variable costs are estimated to be 30% of sales & fixed..

  What is the default risk premium on corporate bonds

There are questions on Financial Management and Markets. Like What is the default risk premium on corporate bonds?

  The implicit annual rate of return

You are reviewing your portfolio for which you know that 10 years ago you invested $17,850 in Amazon stock (AMZN). You are pleasantly surprised that the current value of the stock is $227,985. However, realizing that it was 10 years ago, you are inte..

Free Assignment Quote

Assured A++ Grade

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd