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Burlington Motor Carriers, a trucking company, is considering installing a two-way mobile satellite messaging service on its 2,000 trucks. On the basis of tests done last year on 120 trucks, the company found that satellite messaging could cut 60% from its $5 million bill for long-distance communication with truck drivers. More importantly, the drivers reduced the number of “deadhead” miles those driven with non paying loads by 0.5%.Applying that improvement to all 230 million miles coverd by the Burlington fleet each year would produce an extra $1.25 million savings.Equipping all 2,000 with the satellite hookup will require an investment of $8 million and the construction of a message-relaying system costing $2million. The equipment and onboard devices will have a service life of eight years and negligible salvage value; they will be depreciated under the five-year MACRS class. Burlington’s marginal tax rate is about 38%, and its required minimum attractive rate of return is 18%(a) Determine the annual net cash flows from the project.(b) Perform sensitivity analysis on the project’s data, varying savings in telephone bills and savings in deadhead miles. Assume that each of these variable can deviate from its base-case expected value +-10%, +-20% and +-30%(c) Prepare sensitivity diagrams and interpret the results.
kelly manchester wants to know what price home she can afford. her annual gross income is 45000. she owes 750 per month
Given the following statement, please indicate whether it is true or false, and why: "The relationship between operating and financial leverage is additive rather than multiplicative"
Company Z stock is trading at $30 per share given that the risk free interest rate is 9 percent and the equilibrium risk premium on the market portfolio is 8 percent.
Howton & Howton Worldwide is considering its operations for the coming year, and the CEO wants you to forecast the company's additional funds needed.
You make deposits of $2 each year for 30 years. The rate of interest that will prevail is 10 percent for the first 20 years and then 12 percent for the remaining period.
You have just purchased a new warehouse. To finance the purchase, you've arranged for a 30-year mortgage loan for 80% of the $2,400,000 purchase price. The monthly payment on this loan will be $13,000. What is the APR on this loan? The EAR?
Current assets are equal to 20% of sales and fixes assets remain at their current level of 1 million.
What external factors affect the optimal capital structure? What is the benefit of being at the optimal capital structure?
Weyerhaeuser, The forest products manufacturer, traded at $42 at the starting of 1996. Beta services typically place its beta at 1.0 with a market risk premium of 6%.
your response should be a minimum of one 1 single-spaced page to a maximum of two 2 pages in length.discuss each of the
What do you think are the ethical limits that managers should observe when taking risk with other people's money? If you were an investor in a firm, what would you expect from the managers? Constant communication? Dollar limitations?
Calculate the PMT on a mortgage
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