Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
A Bakery is considering the purchase of a new $18,600 donut making machine. The new machine would permit the company to reduce the amount of part-time help needed, to a cost saving of $3,800 per year. In addition, the new machine would allow the company to produce a new type of donut, which would replace one existing type, resulting in the sale of 1,000 donuts with an additional $1.2 in revenue per donut. The new machine would have a 6-year life and will depreciated straight line. The salvage value at the end of year 6 is $9,125. The cost of capital is 12 percent.
1. Compute EBIT for each year. What is the EBIT in years 1 through 6? Tax rate is 40%.
2. What is the after-tax salvage value?
3. What is the cash flow is year 0?
4. What are the cash flows in years 1-5?
3800
3100
4240
5. Compute the NPV and IRR.
What was the average annual growth rate of dividends for this firm?
Bond X is a premium bond making semiannual payments. What do you expect the prices of these bonds to be in twenty years?
Mosaic is rehabilitating an old phosphate mine into a rather challenging golf course.
ABC had assets of $15 million last year; sales were $18 million; liabilities plus accruals that increased spontaneously with sales was 8% of assets; net income was $275,000 of which $120,000 was paid out in the form of dividends. What is ABC's capita..
Your firm wishes to issue additional bonds to the public at face value. What coupon rate must the new bonds offer to sell at face value?
Consider a standard mortgage (360 months) with monthly payments and a nominal rate (monthly compounding) of 5.00%.
What is the firm’s weighted average cost of capital? What is the cost of capital for an otherwise identical all-equity firm?
The common stock of Old Betsy Flags is constantly selling for $28 per share. The company has been growing at a constant annual rate of 4%, and this growth is expected to continue for an infinite period. The required rate on the stock is 11%. If you b..
A European call and European put have the same time to maturity and strike price.
Calculate the ABC Corporation’s after-tax IRR from opening the office building under the assumption that it is leased.
Create a balance sheet and an income statement for your business using the information given in the attachment.
Calculate the bond equivalent yields and the equivalent annual returns for this repurchase agreement with a 7-day maturity.
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd