New fixed assets is required to support this growth in sales

Assignment Help Financial Management
Reference no: EM131448476

Thorpe Mfg., Inc., is currently operating at only 87 percent of fixed asset capacity. Current sales are $410,000. Suppose fixed assets are $350,000 and sales are projected to grow to $479,000. How much in new fixed assets is required to support this growth in sales? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest whole dollar. Omit the "$" sign in your response.)

Reference no: EM131448476

Questions Cloud

New machine for the production of latex : Vandelay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $3,300,000 and will last for 6 years. Variable costs are 35% of sales, and fixed costs are $1,600,000 per year. Machine B costs $5,040,000 a..
Generate annual cash flows : A project requires an upfront investment of $20,000, to be paid today. It will generate annual cash flows for 5 years that grow at 10% per year, after which the project will end with no residual value. Year 1 cash flows will be $5,000. The appropriat..
What is your effective annual rate of return : You’ve just opened a margin account with $20,000 at your local brokerage firm. You instruct your broker to purchase 850 shares of Landon Golf stock, which currently sells for $99 per share. What is your total dollar return from this investment? What ..
The risk free rate and the beta remain unchanged : A Stock has a required return of 11%, the risk- free is 7%, and the market risk premium is 4%. What is the stock’s beta? If the market risk premium increased to 6%, what would happen to the stock’s required rate of return? What would it be? Assume th..
New fixed assets is required to support this growth in sales : Thorpe Mfg., Inc., is currently operating at only 87 percent of fixed asset capacity. Current sales are $410,000. Suppose fixed assets are $350,000 and sales are projected to grow to $479,000. How much in new fixed assets is required to support this ..
According to the dividend discount model : Consider a company that pays out all of their free cash flow as a dividend to shareholders. They paid a dividend last year (year 0) of $1.50. Dividends are expected to grow at 5% for the life of the firm (aka forever). The appropriate discount rate i..
Break-even purchase price in terms of present value : The Cornchopper Company is considering the purchase of a new harvester. Cornchopper has hired you to determine the break-even purchase price in terms of present value of the harvester. This break-even purchase price is the price at which the project’..
What is the present worth of savings if nominal interest : The benefit of a revised production schedule for a seasonal manufacturer will not be realized until the peak summer months. Net savings will be $1,000, $1,100, $1,200, $1,300, and $1,400 at the ends of months 4, 5, 6, 7, and 8, respectively. It is no..
Calculate amount of costs you will need to cut to break even : Using the data from the self-quiz problem on cost shifting, assume those who pay charges will allow a maximum charge of $2,100. Calculate the amount of costs you will need to cut to break even.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the change in price the bond

A 6.65 percent coupon bond with fifteen years left to maturity is priced to offer a 8.3 percent yield to maturity. You believe that in one year, the yield to maturity will be 8.0 percent. What is the change in price the bond will experience in dollar..

  What is the formula for the nationally optimal tariff

What is the formula for the nationally optimal tariff? - What is the optimal tariff if the foreign supply of our imports is infinitely elastic?

  What is the total amount invested by all stockholders

On January 29, Quality Marble Inc., a marble contractor, issued for cash 75,000 shares of $10 par common stock at $23, and on May 31, it issued for cash 100,000 shares of $4 par preferred stock at $6. a. Illustrate the effects on the accounts and fin..

  Invest in portfolio containing stock-beta of portfolio

You have $100,000 to invest in a portfolio containing Stock X and Stock Y. Your goal is to create a portfolio that has an expected return of 17 percent. Stock X has an expected return of 14.8 percent and a beta of 1.35, and Stock Y has an expected re..

  Spot exchange rates-forward exchange rates-interest rates

How would you use financial instruments, such as forward, futures, option, and swap contracts, to hedge exchange rate risk? What is the relationships among spot exchange rates, forward exchange rates, interest rates, and inflation rates? Why do you t..

  Immediately after coupon payment-calculate the market price

A $10,000 par value bond with coupons at 8%, convertible semi-annually, is being sold three years and four months before the bond matures. The bond is redeemable at $C, and purchase will yield 6% convertible semi-annually to the buyer.

  Describe currency options-futures options-index options

Describe currency options, futures options, index options, and commodity options. Clearly state which variables in these securities correspond with the binomial pricing inputs used for stock options. Provide rationale for your determination

  What must the dividend payout ratio be

Frasier Cabinets wants to maintain a growth rate of 5 percent without incurring any additional equity financing. The firm maintains a constant debt-equity ratio of .55, a total asset turnover ratio of 1.30, and a profit margin of 9 percent. What must..

  Common technique for evaluating most capital investments

The most common technique for evaluating most capital investments is(are). Suppose a particular investment project will generate an immediate cash inflow of $1,000,000 followed by cash outflows of $500,000 in each of the next three years. The project..

  What is the maturity risk premium for the two-year security

The real risk-free rate is 2%, and inflation is expected to be 2% for the next 2 years. A 2-year Treasury security yields 5.2%. What is the maturity risk premium for the 2-year security?

  What would be the cash flow from salvage

Assume the following for a piece of equipment: Purchase price $20,000; installation costs of $2,500; 4-Yr useful life with an estimated salvage value of $4,500; tax rate 40%; What would be the cash flow from salvage if the asset sold after 2 years fo..

  Terminated early without achieving all original objectives

Your company experienced some cash flow issues during your last project that caused the project to be terminated early without achieving all its original objectives. You calculate the company’s Quick Ratio and find it to be 1.6. What does this tell y..

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd