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The Target Copy Company is contemplating the replacement of its old printing machine with a new model costing $ 573. The new machine will operate for 3 years and then project will be shut down and all equipment sold. The old machine, which originally cost $ 556, has 2 years of depreciation remaining and a current book value of 22% of the original cost. The old machine has a current market value of $ 409 and should be worth $ 137 at the end of 3 years. The new printing machine could be sold for $ 166 in 3 years. If we buy the new machine our inventory levels will go from $600 to $900. Inventory levels will return to normal at the end of the project. Our annual sales will go from $15,000 to $20,000. Target's corporate tax rate is 25 percent. Both machines are in the 3-year MACRS class, with rates of 33% for year 1, 45% for year 2, 15% for year 3, and 7% for year 4. What are the expected Terminal Cash Flows at the end of year 3, if we replace the old printing machine? This could be a cash inflow or a cash outlay. Be sure to use the - sign should this be a cash outflow. Show your answer to the nearest $.01 Do not use the $ symbol in your answer.
what is the effective financing rate for a U.S. firm that takes out a one-year, uncovered NZ$ loan?
Fama’s Llamas has a WACC of 10.4 percent. The company’s cost of equity is 13.4 percent, and its cost of debt is 8.8 percent. The tax rate is 38 percent. Required: What is Fama’s target debt-equity ratio?
You have $132,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. how much money will you invest in Stock Y?
Firm X needs to net $7,700,000 from the sale of common stock. How many shares must be sold?
A common component of investing money is to take advantage of a financial institution’s willingness to pay compound interest.
Convert the projected franc flows into dollar flows and calculate the NPV.
You want to accumulate $3 millions by your retirement date, which is 25 years from now. You will make 25 deposits in your bank, with the first occurring today. The bank pays 7.82% interest, compounded annually. How much must your first deposit be to ..
Musashi is a stay-at-home parent who lives in San Diego and does some consulting work for extra cash. At a wage of $40 per hour, he is willing to work 7 hours per week. At $50 per hour, he is willing to work 10 hours per weeK. Using the midpoint meth..
The Hartnett Corporation manufactures baseball bats with Pudge Rodriguez’s autograph stamped on them. Compute the break-even point in units.
The 10-year $1,000 par bonds of Vail Inc. pay 15 percent interest. Determine the yield to maturity. Should you purchase the bond at the current market price?
Burnham & Company's $75.00 par-value preferred stock pays an annual dividend of $11.00. The stock has a beta of 0.85, the current T-bill rate is 2.40%, and the S&P 500's expected return (RM) is 11.30%. Assuming that CAPM holds, what is the intrinsic ..
The firm has estimated the after tax cost of each source of funds. Debt costs .07, preferred stock .11, retained earnings .20 and new common stock .22. The firm is operating under conditions of capital rationing and therefore will not sell new stock ..
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