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!
Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems. System A costs $276,000, has a four-year life, and requires $84,000 in pretax annual operating costs. System B costs $390,000, has a six-year life, and requires $78,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Whichever system is chosen, it will not be replaced when it wears out. The tax rate is 34 percent and the discount rate is 8 percent.
Calculate the NPV for both conveyor belt systems. (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16). Negative amounts should be indicated by a minus sign.)
NPV
System A $
System B $
Which system should the firm choose?
System A
System B
The economic order quantity- determines the reorder point. provides the lowest inventory costs.
Currently bonds with a similar credit rating and maturity as the firm's outstanding debt are selling to yield 7.19% while the borrowing firms corporate tax rate is 34%. The after tax cost of debt debt for the firm is ________% Common stock for a firm..
Ghana cedes has depreciating against all major foreign trading currencies in recent time. Use the experience of the Ghanaian firms to suggest the need for exchange rates forecasting in Ghana. Discuss with examples the three main types of arbitrage. D..
Suppose that the consensus forecast of security analysts of your favourite company is that earnings next year will be E1 = $5.00 per share. Suppose that the company tends to plow back 50% of its earnings and pay the rest as dividends.
You purchased one of Big Corp.’s 8%, 10-year convertible bonds at its $1,000 par value a year ago when the company’s common stock was selling for $20. Similar bonds without a conversion feature returned 12% at the time. What would your return have be..
Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $0.50 coming 3 years from today. what is..
Rank from lowest credit risk to highest credit risk the following bonds, with the same time to maturity, by their yield to maturity: Treasury bond with yield of 5.55 percent, IBM bond with yield of 7.95 percent, Trump Casino bond with a yield of 9.15..
Inflation is expected to be 3 percent over the next year. You desire an annual real rate of return of 2.5 percent on your investments. What nominal rate of interest would have to be offered on a one-year Treasury security for you to consider making a..
ABC Corp.'s bonds currently sell for $1,180 and have a par value of $1,000. They pay a $50 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to maturity (YTM)?
Inflation has been relatively stable over the last several decades, averaging roughly 2.85% per year. A local business owner began manufacturing snowshoes 6 years ago, at which time her raw materials cost $23.85 per pair. Taking into account the effe..
Find the periodic payment R required to amortize a loan of P dollars over t years with interest charged at the rate of r%/year compounded m times a year.
The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer’s base price is $1,080,000, and it would cost another $22,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold af..
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