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Please post your completed file(s) to the Case Study #3 folder in Blackboard before you leave class today. Make sure I have received your file(s).Each work is your own; please reference any sources when required. The Case work represents 15% of your total course grade.Capital Budget AnalysisBased on the inputs below prepare a capital budget analysis for this Base Case using the Net Present Value, Internal Rate of Return and Profitability Index determining whether the project is feasible. Please show your spreadsheet calculations and your final determinations of "go" or "no go" on the project.Project Inputs:WACC - the cost of capital (hurdle rate) will be the current yield of the 10 Year U.S. Treasury Note: as of Friday July 18 2014 the yield was 2.54%, plus 630 basis points.Project Investment Outlay, Year 0 - $500,000 Project Investment Life - 10 yearsProject Depreciation - $50,000 / yearProject Salvage Value - $20,000Working Capital Base of Annual Sales - 10%Expected inflation rate per year, Selling Price Per Unit - 5%Expected inflation rate per year, Manufacturing Cost per unit - 3.5% Expected inflation rate per year, Fixed operating costs per year - 2.5% Project Tax Rate - 30%??Bus 530 Case 3: HasseInputs continued:Units sold per year - 20,000Selling Price per Unit, Year 1 - $75Fixed operating costs per year excluding depreciation - $250,000 Manufacturing costs per unit, Year 1 - $33.75Scenario Analysis:Base Case Scenario - 20,000 units sold per year - 57% probability Worst Case Scenario - 10,000 units sold per year - 25% probability Best Case Scenario - 30,000 units solder per year - 18% probabilityPrepare a scenario analysis once you have completed your original discounted cash flow analysis. Is the project still a "go" or "no go"?Sensitivity Analysis:In addition to the above, also prepare a sensitivity analysis based on the following variables -Deviation from the Base: -20%, -10%, 0%, +10%, +20%Sensitivity Variables: (1). Selling Price per Unit, (2). Manufacturing Cost per Unit, (3). Depreciation.Please show the range in the NPVs for each variable and chart the analysis. Which variable has the highest risk and which variable has the lowest risk? Explain.??
The spot exchange between U.S. dollar and German mark is $.5500/DM. The dollar deposit rate is 8% and DM deposit rate is 4%.
Egyptian Ingot is the Egyptian subsidiary of TransMediterranean Aluminum, a British multinational that fashions automobile engine blocks from aluminum.
Evaluate the standard deviation of this portfolio and please enter your answer as a percentage to three decimal places
Suppose you have decided to acquire a new car that costs $30,000. You are considering whether to lease it for 3-years or to buy it and finance the purchase with a 3-year instalment loan.
Smolinski company is considering an investment which will return a lump sum of $5000,000 five years from now. What amount should simolinski company pay for this investment to earn a 15% return.
Computation of yield to call of a bond and What is their yield to call (YTC)
Explain Capital Budgeting Techniques for Supernormal Growth and Dividends are expected to grow at a 25 percent rate for the next 3 years and with growth rate falling off to a constant 8 percent thereafter
Evaluate each project's payback period cutoff and which would you accept if William's Payback period cutoff is 2 years?
Mime Theatrical Supply is in the process of negotiating a line of credit with two local banks. The prime rate is currently 8 percent. The terms follow: Calculate the effective interest rate of both banks.
Firm x's currently outstanding bonds have a 10 percent coupon and a 12 percent yield to maturity. company x believes it could issue new bonds at par that would provide a similar yield to maturity.
Suppose a firm has been growing at a 15% yearly rate and is expected to continue to do so for 3 more years. At that time, growth is expected to slow to a constant 4% rate.
Computation of projects using cost-benefit analysis which alternative should be selected and use benefit-cost ratio analysis to solve the problem
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