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Planet Enterprises is purchasing a $10.3 million machine. It will cost $47 000 to transport and install the machine. The machine has a depreciable life of five years using? straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.4 million per year along with incremental costs of $1.1 million per year.? Planet's marginal tax rate is 30%.
You are forecasting incremental free cash flows for Daily Enterprises. What are the incremental free cash flows associated with the new? machine?
1. Rahul and Miranda want to make a lump-sum investment for their newborn's college education, and their goal is to accumulate $80,000 in 18 years. What is the amount they must invest today to reach their goal if the annual rate of return is 8%?
A fixture is being considered to improve a manufacturing process (see current rate information below). If it is implemented, it will reduce the cycle time.
From your answers to Parts a, b, and c, which project would be selected? If the WACC was 18%, which project would be selected?
a. What is the cost of equity? b. What is the after-tax cost of debt? c. What is the cost of capital?
Raymond Manufacturing faces a liquidity crisis: It needs a loan of $100,000 for 1 month. Having no source of additional unsecured borrowing, the firm must find a secured short-term lender. The firm's accounts receivable are quite low, but its invento..
Based on the information given, compute the WACC for the company. If an investment project generates a return of 11% and has similar risk level as the overall company, would you accept this project? Why or why not?
Are organisational members punished or consoled when an idea fails? Identify three strategies to increase the organisation's acceptance of failure.
Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred stock. The yield to maturity on the company's outstanding.
Calculate the discount rate consistent with a cap rate of 12 percent and a growth rate of 6 percent. Show how your answer would change if the cap rate dropped to 10 percent while the growth rate declined to 5 percent.
A firm has a target debt/equity ratio of 1.2. The firm's cost of equity is 14% and its cost of debt is 9%. The tax rate is 34%. What is the firm's WACC?
Calculate BSX's ROA for 20X1 [express the ROA as 3 decimal digits rather than as a percentage, so 0.123 not 12.3%. Don't round so both 0.1236 and 0.1234 should be 0.123] ROA:
What are the weaknesses of using replacement cost? What are the two most common sources of capital to most firms?
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