User Account

All Pages

Explain why net operating working capital is

Assignment Help Finance Basics
Reference no: EM132546872

PKP Sdn. Bhd. must choose between two machines, X and Y. The purchasing costs today and maintenance expenses at the end of every year for these two machines are given as follows:

Year
Machine X
Machine Y
0
1
2
3
4
5
-RM2,000,000
-RM200,000
-RM200,000
-RM200,000
-
-
-RM2,500,000
-RM210,000
-RM210,000
-RM210,000
-RM210,000
-RM210,000

All cash flows occur at year-end and the discount rate is 12%. Assume that revenues are the same regardless of the machine, and assume that whichever machine the company chooses, it will continue to buy that model forever. Which machine should the company choose? Tax rate is 24% and simplified straight line is used as the method of depreciation.

c) Explain why net operating working capital is included in a capital budgeting analysis and how it is recovered at the end of a project's life.

Reference no: EM132546872

Questions Cloud

Exchange rate forecasting : Identify advantages and disadvantages of international investing.
Qualities of effective ethical strategic leader : Write a paper about qualities of effective ethical strategic leader. Strategic leadership includes the ability to anticipate events, envision possibilities
Population cultural considerations-genetic predispositions : Practicum Discussion- Are there any cultural considerations that might inform your approach to caring for this population?
Calculate expected earnings per share : Calculate expected earnings per share (EPS) if the firm is perfectly hedged.
Explain why net operating working capital is : The purchasing costs today and maintenance expenses at the end of every year for these two machines are given as follows:
Domain of option trading strategies : Illustrate the strategy called "long butterfly spread on call options" within the domain of option trading strategies.
Category of riba does transaction fall : Under which category of Riba does this transaction fall? Justify your answer.
Compute the value of pet food company bonds : Compute the value of Pet Food Company bonds if the market interest rate on this type of bond is 8.37 percent.
Significant risks and effects on roi : Identify at least one of the significant risks and effects on ROI from each of the requirements set by or potential actions

Reviews

Write a Review

Finance Basics Questions & Answers

  Japanese banks

Banks in Japan are allowed to own stock

  What is the difference between u.s.gaap and ifrs

What is the difference between u.s.GAAP and IFRS in measuring intangible assets?

  What is the book value of the equipment in given time

Harden Industries considers buying $3,650,000 equipment for producing rockets in Houston, TX. The equipment will have 7-year useful life and $2,000,000.

  Interpret a multiple regression equation

The assignment was to calculate the regression and interpret the estimated regression coefficients. I am having trouble putting this into words.

  What is the risk neutral probability for a 6 month

Stock trading at $200. The stock follows a lognormal distribution with drift of 10% and volatility of 20%. The risk free rate is 6%. What is the probability for a 6 month 100 put to expire in the money? Find N(-d2).  What is the risk neutral..

  Should it accept either of them

Buy Coastal Inc, imposes a payback cutoff of three years for its international investments projects. If the company has the followingtwo projects available, should it accept either of them? show work

  What will happen to interest rates

In the real world the Republicans succeed in reforming the income tax code and lowering the corporate tax rate to 15%. What will happen to interest rates?

  To hedge against future unanticipated and significant

to hedge against future unanticipated and significant increases in borrowing rates which of the following alternatives

  Bank management style

Economists often refer to the ratio er, where er = ER/DD = (Excess reserves)/(Demand deposits), when they want to quickly assess whether a bank's management

  Clculate the next expected dividend per share d1 d0 04650

the bouchard companys eps was 6.50 in 2002 and 4.42 in 1997. the company pays out 40 percent of its earnings as

  How much money will you invest in stock x and stock y

If your goal is to create a portfolio with an expected return of 12.65 percent, how much money will you invest in Stock X and Stock Y?

  What purpose do venture capitalism firms have

What purpose do Venture Capitalism firms have and why should they be abundant in Emerging Markets?

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