Reputable supplier of integrated circuits

Assignment Help Risk Management
Reference no: EM131539077

Mountain Home Systems, Inc. is a well-known and reputable supplier of integrated circuits to manufacturers of telecommunications devices. The firm is currently debating whether to expand its sales to car-telephone manufacturers. While the firm expects an extra $2 million in sales if it enters this market, it also knows that 15% of its sales will ultimately be uncollectible. In addition, collection costs will be 2% on all new sales and the firm's production and selling costs are 80% of sales. Mountain Home's tax rate is 30%. a) Calculate Mountain Home's additional net income from the new sales. b) If Mountain Home can turn its receivables over 4 times per year, what will its additional investment in accounts receivable be and what will the firm earn as an after-tax return on that investment? c) Mountain Home management requires that any new project earn a minimum of 12% return on investment. Should the firm enter the car-telephone manufacturer market?

Reference no: EM131539077

Questions Cloud

Why should the middle income family pay more : Why should the middle income family pay more for the same healthcare service received by low/no-income families
Differentiat between sales budget and operating budgets : Operating budgets, historical income statement, and budgeted balance sheet.
Balance of this account after the initial investment : Based on the above assumptions, what will be the balance of this account after the initial investment and the 18 annual returns earning the hypothetical 6%?
Effective treatment for addicted criminal justice clients : Use the "Effective Treatment for Addicted Criminal Justice Clients" article as a sample for how to write a behavior plan.
Reputable supplier of integrated circuits : Mountain Home Systems, Inc. is a well-known and reputable supplier of integrated circuits to manufacturers of telecommunications devices.
Describe the taguchi methods for experimental : Describe the Taguchi Methods for experimental design and how the concepts of robustness and design for quality are integrated into this method of experimental.
What is the present value of tax shield : What is the amount of the annual interest tax shield if the tax rate is 30%? What is the present value of the tax shield?
Five project management process groups : In two pages, briefly describe what happens in each of the five project management process groups (initiating, planning, executing, monitoring and controlling.
Firm pay on each outstanding bond each month : How much interest must the firm pay on each outstanding bond each month?

Reviews

Write a Review

Risk Management Questions & Answers

  Estimate the worst-case operational risk loss

Suppose that there is a 1% probability that operational risk losses of a certain type exceed $10 million. Use the power law to estimate the 99.97% worst-case operational risk loss when the ?

  Understanding of the sources of interest rate risk

FN0366 Interest Rate, Liquidity and Operational Risks Assignment. For your final evaluation, you are required to present a report critically analysing and demonstrating your understanding of the sources, measurement and management of the three risk..

  What is the stock expected price

What is the stock's expected price 3 years from today (i.e. solve for P3)?

  How could you still implement your strategy

Using only what you know in the information provided above, how could you still implement your strategy? What is this called? What is the price you would pay for this?

  What other factor play into risk that are not cover in video

What other factors play into risks that are not covered in the video? When have you had to consider risk and return in personal or professional decision-making?

  Discuss the technological project management process

discussion of the technological project management process and the risks in managing technological projects, including a discussion of the main risks that can arise and the likely source of those risks.

  Risk monitoring and control demonstrate the processes and

risk monitoring and control demonstrate the processes and procedures you used to conduct risk monitoring and control

  How much is brookes gain or loss on the sale

Brooke inherited a mountain cottage from her grandmother. How much is Brooke's gain or loss on the sale?

  State the definitions of terms used

Please see the problem set out below, and answer A & B. Please show all your steps in arriving at the answer. Clearly state the definitions of terms used, and also state any formulas used.

  What is the dollar pro?t that collins makes on the sale

What is the dollar pro?t that Collins makes on the sale of the MC-28? What is the percentage pro?t?

  What are the strengths and weaknesses of the apt as a theory

What is the arbitrage pricing theory (APT) and how is it similar and different from the CAPM? What are the strengths and weaknesses of the APT as a theory of how risk and expected return are related?

  What are the most important operational and financial risks

What are the most important operational and financial risks in this arrangement? How can the company pay its Canadian employees, who presumably want Canadian dollars, when its U.S. customers are paying in U.S. dollars?

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