Reference no: EM132031838
"A firm is considering purchasing a computer system.
-Cost of system is $176,000. The firm will pay for the computer system in year 0.
-Project life: 6 years
-Salvage value in year 0 (constant) dollars: $17,000
-Depreciation method: five-years MACRS
-Marginal income-tax rate = 37% (remains constant over time)
-Annual revenue = $121,000 (year-0 constant dollars)
-Annual expenses (not including depreciation) = $85,000 (year-0 constant dollars)
-The general inflation rate is 2.8% during the project period (which will affect all revenues, expenses, and the salvage value but not depreciation).
-The firm borrows the entire $176,000 at 11.9% interest to be repaid in 2 annual payments. The debt interest paid and the principal payment SHOULD NOT be changed by the inflation rate. Lending agencies set the interest rate of borrowing to account for the inflation rate.
Calculate the effects of borrowing and include the debt interest paid and the principal repayment into the income statement and cash flow statement. Determine the INFLATION-FREE IRR' of the computer system. Enter your answer as a percentage between 0 and 100."
Company would be willing to pay for the project
: What is the maximum initial cost the company would be willing to pay for the project?
|
Discuss advantages of using a between-subjects design
: Discuss some of the advantages of using a between-subjects design. Just need 125 words. The response must be typed.
|
What was company change in net working capital or NWC
: The 2009 balance sheet showed current assets of $1,620 and current liabilities of $1,020. What was the company's 2009 change in net working capital, or NWC?
|
Identify main effects and interactions for factorial design
: Identify the independent variable(s), dependent variable, and any possible extraneous variable. Identify main effects and interactions for the factorial design.
|
Repayment into the income statement and cash flow statement
: Calculate the effects of borrowing and include the debt interest paid and the principal repayment into the income statement and cash flow statement.
|
Evaluate the credibility of the character portraying
: Evaluate the credibility of the character portraying the psychology professional (job title, credentials, level of experience, etc.).
|
What is addition to retained earnings
: Papa Roach Exterminators, Inc., has sales of $734,000, What is the addition to retained earnings?
|
What will your total homemade dividend be in two years
: Suppose you want only $2,700 total in dividends the first year. What will your total homemade dividend be in two years?
|
Explain factors for determining the client stage of change
: The stages of change model suggests that clients who are in the process of changing addictive behavior move through successive stages.
|