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Question: Cool Cat Cabinets (CCC) is evaluating whether to replace an aging machine. The existing machine is being depreciated at $40,000 per year, whereas the depreciation for a new machine is expected to be $35,000 per year. CCC's operating income, excluding depreciation, is expected to be $90,000 no matter which machine is used. The firm's marginal tax rate is 40 percent. If the new machine is purchased, what effect will the change in depreciation have on the firm's (a) net income and (b) supplemental operating cash flows. CCC has no debt.
Translate this into average inventory (in units and dollars) before and after the change in the cash discount policy. c. Compute the following income statement. d. Should the new cash discount policy be utilized? Briefly comment.
How does this affect your answers to parts A and B? What required rates of return would make you indifferent to all three options?
A firm paid dividends of $10,000, paid interest of $20,000, reduced debt principal outstanding (paid off debt) in the amount of $100,000, and sold new stock for $150,000. What was the firm's cash flow from financing activities?
Cast Out Co. invested $16,200 in a project. At the end of two years, the company sold the project for $23,800. What annual rate of return did the firm earn on this project?
Suppose AMC waits until after the news comes out to do the share repurchase. What is AMC’s share price after the repurchase if its enterprise value goes up? What is AMC’s share price after the repurchase if its enterprise value declines?
Jason calculated that the fixed costs will be about $400,000. What is the breakeven point of operations in units?
A company had sales of $450,000 over the last quarter (90 days) and ending a/r of $275,000. If the company's terms are net 45.
What is the difference between an insurance agent and a broker? Explain, the law of large numbers. How do deductibles affect moral hazard?
Analyze how interest rates and inflation affect market performance, using real-world examples from different economic periods to support your answer.
mustard patch doll company needs to purchase new plastic moulding machines to meet the demand for its product. the
As Pharma Heal Corporation has grown successful, so have Akosua and Isabella. With record sales this past year (thanks to the help of its international business consultant), Isabella realized the substantial income from a variety of sources in sev..
In order to maintain the present capital structure, how much of the new investment must be financed by common equity? Assuming there is sufficient cash flow for Tysseland to maintain its target capital structure without issuing additional shares of ..
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