User Account

All Pages

What is the cash flow created by the merchandise side

Assignment Help Accounting Basics
Reference no: EM133158510

Question - Suppose that Disney is considering one more Toy Story movie. The company is not confident in box office sales, but they do believe that the file will create merchandising opportunities (DVDs, toys, clothes,..etc). Their early analysis believes the move will have an NPV of -$43.00 million if you only look at ticket sales in the theater. However, they also believe that the movie will create sales of $72.00 million per year in merchandise. The merchandise sales will decline each year by 26.00% in perpetuity. Let's assume that after-tax operating margin on these sales is 11.00%, and that Disney has a cost of capital at 10.00%. What is the cash flow created by the merchandise side effect in the first year?

Reference no: EM133158510

Questions Cloud

Drawbacks and risks to a broad generic business strategy : Identify a company you know that has a business strategy that is too broad and generic in nature, or too focused. Explain your rationale.
What are some possible changes that can be made : What are some possible changes that can be made to the employee benefits package that would help keep costs under control
Discuss what is required to ensure change readiness : Discuss what is required to ensure change readiness rather than change resistance (use Oakland's figure eight framework to help guide the changes needed moving
How much money does he need to deposit into the annuity : How much money does he need to deposit into the annuity each quarter for the annuity to have a total value of $72,000 after 16 years
What is the cash flow created by the merchandise side : Their early analysis believes the move will have an NPV of -$43.00 million. What is the cash flow created by the merchandise side
What is the npv : The equipment will require the company to hold an extra $59,000 of inventory over the 3-year period. What is the NPV if the discount rate is 12 percent
Define and give examples of off-balance sheet information : Define and give examples of off-balance sheet information. What steps should auditors take if the client has multiple locations being counted
Develop a new stylish version of an electric bike : The project is to develop a new stylish version of an electric bike with new features.
Demonstrates an understanding of the key concepts : Demonstrates an understanding of the key concepts of: Breach of Director's Duties and Remedies and Penalties under the Corporations Act

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd