What rate does the firm just break even

Assignment Help Finance Basics
Reference no: EM132507520

Consider a firm with a contract to sell an asset for $115,000 three years from now. The asset costs $76,000 to produce today. Given a relevant discount rate on this asset of 13 percent per year, will the firm make a profit on this asset? At what rate does the firm just break even?

Reference no: EM132507520

Questions Cloud

How much was manufacturing overhead under- or overapplied : Manufacturing overhead totaling $590,000 for 73,550 direct labor hours. By how much was manufacturing overhead under- or overapplied for the year?
What is the project payback period-bill : The first cash inflow occurs at the end of the first year. Assume the required return is 11 percent. What is the project's payback period?
Prepare t-accounts for the direct materials inventory : Prepare T-accounts for the following accounts: Direct Materials Inventory, Work in Process Inventory, Manufacturing Overhead Control
Summarise your response to the topic : You need to organise your thoughts to make your essay more coherent and thoughtful. The organisation of ideas is vital since it will bolster the argument.
What rate does the firm just break even : Given a relevant discount rate on this asset of 13 percent per year, will the firm make a profit on this asset? At what rate does the firm just break even?
Calculate the company predetermined overhead rate : Assume that Rector Company uses direct labor hours as its manufacturing overhead application base. Calculate the company's predetermined overhead rate.
Value change as the underlying stock price changes : If the portfolio of options and stock is made delta neutral will the value change as the underlying stock price changes? Justify your answer.
Calculate the duration of a zero-coupon bond : Calculate the duration of a zero-coupon bond with five years to maturity, face value of $1000, and effective annual yield of 12.1604%.
Discuss the appropriateness of the manufacturing overhead : Discuss the appropriateness of the manufacturing overhead application base used the Barlowe Manufacturing produces cell phone covers.

Reviews

Write a Review

Finance Basics Questions & Answers

  International aspects of financial management

Currently, you can exchange 100 for $132.66. The inflation rate in Europe is expected to be 3.1 percent as compared to 3.6 percent in the U.S.

  Solving bep problems

Calloway Cab Corporation determines its break even strictly on the basis of cash expenditures related to fixed expenses. Its total fixed costs are $400,000, but 20% of this value is represented by depreciation.

  Why do corporations split their stock

Assume you want to purchase stock. Would you use a full-service broker or a discount broker? Would you ever trade stocks online?

  Why are interest charges not deducted

Why are interest charges not deducted when a project's cash flows for use in a capital budgeting analysis are calculated?

  If a company plans to issue preferred stock with a

if a company plans to issue preferred stock with a perpetual annual dividend of 2 per share and a par value of 25. if

  Capital budgeting methods are presented

Assume that two gas stations are for sale with the following cash flows; CF1 is the Cash Flow in the first year, and CF2 is the Cash Flow in the second year. This is the time line and data used in calculating the Payback Period, Net Present Value, an..

  Valuation equation of lev and schwartz outline

How would you suggest proceeding? Would you agree with the valuation equation of Lev and Schwartz outline by Flamholtz, (1972)?

  Asset valuation and risk

Laura Drake wishes to estimate the value of an asset expected to provide cash inflows of $3,000 per year at the end of years 1 through 4 and $15,000 at the end of year 5. Her research indicates that she must earn 10% on low-risk assets, 15% on..

  What is the average daily disbursement floathow much

no more pencils inc. disburses checks every two weeks that average 93000 and take seven days to clear. ignore the

  Human resource journals related to training

Your assignment is to submit four annotated bibliographies. One annotated bibliography from four different Human Resource Journals related to training.

  Compute the company gross profit percentage

Computing the gross profit percentage Edible Art earned net sales revenue of $63,000,000 in 2016. Cost of goods sold was $40,950,000, and net income reached.

  What is the aftertax cost of debt

A bond with a $1,000 par value sells for $895. The coupon rate is 7%, the bonds mature in 20 years, and coupon interest is paid semi-annually. The tax rate is 35%. What is the aftertax cost of this debt?

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!

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