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Bulldog Inc. purchased a leather-cutting machine seven years ago. The cost of the machine was $11,200. It was epected to be used for 10 years. The machine has been depreciated on a straight-line basis with an estimated salvage value of $1,200. The machine can be sold for $3,500 today. Bulldog is considering the purchase of a new leather-cutting machine to replace exisiting machine. Having the new machine will result in an increase of revenue $13,000, but the operating costs will also increase by $6,000 for 3 years. The new machine cost $14,000, with an expected salvage of $2,000 at the end of the third year. The new machine will be depreciated using MACRS method, and is considered a 3-year property. There will be an increase of $1,600 in net working capital. Gorilla's tax rate is 40% and cost of capital is 16%
The expected after-tax salvage value of the new machine is $1,620. Compute the expected net cash flow at the end of year 3. (Note: You are asked to find CF3 only, not NPV) show work
Quint Enterprises is considering new three-year expansion project that requires initial fixed asset investment of $2.58 million.what is the Operating Cash Flow.
An investment project has annual cash inflows of $3,800, $4,700, $5,900, and $5,100, for the next four years, respectively. The discount rate is 14 percent. What is the discounted payback period for these cash flows if the initial cost is $8,600?
What is the difference between minimum total cost and short-range profit maximization policies in system design?
Preffered Stock is a hybrid security, because it has some characteristics typical of debt and others typical of equity. The following table lists various characteristics of preferred stock. Determine which of these characteristics is consistent with ..
If you require a return of 11 percent on the company's stock, how much will you pay for a share today?
Your portfolio has a beta of 1.24. The portfolio consists of 13 percent U.S. Treasury bills, 28 percent stocks A, and 59 percent stock B. Stock A has a risk level equivalent to that of the overall market. What is the beta of stock B? Provide detailed..
You have just purchased the stock of Mature Company, which is expected to pay dividends of $1.03 next year. The company just paid dividends of $1. This growth rate is expected to continue indefinitely. You require a 10% return on your investment. Wha..
Balance Sheet Analysis Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1.1x Days sales outstanding: 38 days a Inventory turnover ratio: 7x Fixed assets turnover: 2.5x Current ratio: 2.4x Gro..
Sanders Enterprises, Inc., has been considering the purchase of a new manufacturing facility for $284,000. The facility is to be fully depreciated on a straight-line basis over seven years. It is expected to have no resale value after the seven years..
Winnebagel Corp. currently sells 30,000 motor homes per year ay $73,000 each and 14,000 luxury motor coaches per year at $120,000 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 25,000 of thes..
As an organizational leader, would you be for or against tying your compensation to economic value added and why? What other ways could managers be compensated and motivated if not tied to value added economies?
After scouting a number of locations, your financial analysts have settled on a desirable location for one of the firm’s new manufacturing plants.
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