User Account

All Pages

Estimate the potential cash flows

Assignment Help Finance Basics
Reference no: EM132666130

Mr. Knowitall is considering a new line of products to his kitchen tool business. He is thinking about adding a line of cookware which he calls "Unique". Mr. Knowitall estimates that the most likely yearly incremental cash flow will be $26,000 but he is not sure. He had his financial manager estimate the potential cash flows for the new product line along with their associated probabilities of occurrence. The estimates are:

Cash Flows Probability of Occurrence

$20,000 1%
$22,000 12%
$24,000 23%
$26,000 28%
$28,000 23%
$30,000 12%
$32,000 1%

The standard deviation of the estimated cash flows is:

The Coefficient of Variation is

If Mr. Knowitall's other product lines on an average have a Coefficient of Variation of 14%, what can we say about the risk of this product line relative to his other product lines:

Reference no: EM132666130

Questions Cloud

The differences among self-esteem and self-image : What are the differences among self-esteem, self-image, and self-value? Why does it help to differentiate among these terms?
What is the real value of the rent in period : What is the maximum amount of dollars that he could borrow in period 1? Find the real value of this amount and add it to the rental value of period 1
Explaining tax consequences of plan to the carpenters : Write a letter to Finch's management explaining the tax consequences of this plan to the carpenters. Finch's address is 300 Harbor Drive, Vermillion, SD 57069
Interact with smart home devices : How does it interact with smart home devices? Alexa is now connected to smart home devices such as thermostats and microwaves.
Estimate the potential cash flows : Mr. Knowitall is considering a new line of products to his kitchen tool business. He is thinking about adding a line of cookware which he calls "Unique". Mr. Kn
Why is physical security mitigation for external threats : Using proper APA formatting, write a 400-word discussion paper describing: Why is Physical Security mitigation for External Threats and Countermeasures?
Find how much overhead was applied during the month : Find how much overhead was applied during the month? Eyelet Industries produces specialized laces for running shoes, hiking shoes, and work boots
The corporate finance of multinational firms : Based on the capital structure theories, discuss how firms make financing decisions. In general, what are major factors to consider when making capital structur
Does the taxpayer recognize gross income : Ira recently moved to take a job. For the first month on the new job, Does the taxpayer recognize gross income in the following situations

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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