User Account

All Pages

Considering acquiring a new computer

Assignment Help Financial Management
Reference no: EM131318101

Use the following information to answer the following 3 questions.

Your company is facing earnings pressure and is considering acquiring a new computer system that will initially cost $1 million and will save $300,000 per year in inventory and receivables management costs.  The system is will last for five years.

The system is expected to have a salvage value of $100,000 at the end of year 5 and will be depreciated to zero using three year MARCS (rates are: Year 1: .3333, Year 2: .4445, Year 3: .1481, Year 4: .0741). 

The marginal tax rate is 40%.  Assume a required rate of return of 11%.

  • Cash Flow From Assets in Year 5 is:
    • $180,000
    • $280,000
    • $240,000
    • $300,000
  • Net Present Value is:
    • $28,123.68
    • $28,744.07
    • $32,465.21
    • $27,682.15
  • Internal Rate of Return is:
    • 10.0%
    • 12.2%
    • 9.7%
    • 14.6%

Reference no: EM131318101

Questions Cloud

Net cash provided by operating activities and net income : Comment on the difference between net cash provided by operating activities and net income. Speculate on which number is likely to be the better indicator of long-term profitability.
Does media reflect culture or does it create culture : Communication, in the broadest terms, encompasses all media channels through which information is exchanged. That information can be exchanged in a myriad of ways or channels. As technology has progressed, we have seen the advent of the internet a..
Why is specialization so critical to distribution efficiency : Given the principle of minimum transactions, explain why it is possible to have too many participants in a distribution channel.
Decision tree or rule learner in r code : This homework is part of a private Kaggle competition, in the end we only want to submit an excel file with ID and Expected column, and I need the R code as well to submit. I am attaching the data files, both should be used in the code. The assign..
Considering acquiring a new computer : Your company is facing earnings pressure and is considering acquiring a new computer system that will initially cost $1 million and will save $300,000 per year in inventory and receivables management costs.  The system is will last for five years.
What is the value of this bond if the coupon payments : BA Corp is issuing a 10 year bond with a coupon rate of 8 percent and a par value of $1,000. The market interest rate on similar bonds is currently 6 percent. If the coupon payments are made annually, what is the value of this bond? Knight, Inc. has ..
Explain the rationale underlying volume consolidation : Explain the rationale underlying volume consolidation. What are the risks associated with using a single supplier for an item?
Do any of these firms appear to have a cash flow problem : Comment on the difference between net cash provided by operating activities and net income including noncontrolling interest. Speculate on which number is likely to be the better indicator of long-term profitability.
Percent and a standard deviation : Asset K has an expected return of 20 percent and a standard deviation of 35 percent. Asset L has an expected return of 8 percent and a standard deviation of 19 percent. The correlation between the assets is .44. What are the expected return and st..

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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