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Consider a project to supply Detroit with 30,000 tons of machine screws annually for automobile production. You will need an initial $3,800,000 investment in threading equipment to get the project started; the project will last for four years. The accounting department estimates that annual fixed costs will be $600,000 and that variable costs should be $350 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the four-year project life. It also estimates a salvage value of $340,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $450 per ton. The engineering department estimates you will need an initial net working capital investment of $380,000. You require a return of 12 percent and face a marginal tax rate of 38 percent on this project.
Suppose you believe that the accounting department’s initial cost and salvage value projections are accurate only to within ±15 percent; the marketing department’s price estimate is accurate only to within ±10 percent; and the engineering department’s net working capital estimate is accurate only to within ±5 percent. What are your worst-case and best-case NPVs for this project?
ABC Telecom Inc. is expected to generate a free cahs flow (FCF) of $9,900.00 million this year (FCF?1 ?= $9,900.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF2 and FCF3?). ABC Telecom Inc. debt has ..
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Carson Electronics is currently considering whether to ac-quire a new materials-handling machine for its manufacturing operations.
A project has an initial cost of $46,975, expected net cash inflows of $12,000 per year for 12 years, and a cost of capital of 8%. What is the project's NPV?
The Aqua Man, LLC has bonds with 4 years remaining to maturity. What is the yield to maturity at a current market price of $829 and $1,104?
Graser Trucking has $19 billion in assets, and its tax rate is 40%. Its basic earning power (BEP) ratio is 13%, and its return on assets (ROA) is 5%. What is its times-interest-earned (TIE) ratio?
elements of a contract. the paper must be four to five pages excluding the title page and references pages and
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