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.)
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.
|