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!
Question - Answer the below questions in your word file and refer to your excel spreadsheet as a supporting document. Upload your excel spreadsheet under "Excel Submissions". All amounts are in $AUD. In order to increase its market penetration and boost profitability, Woolworths Group (WOW) is evaluating investing in a new "Automated Grocery Store" (AGS). WOW has already identified a facility that could be ideal for this new format of convenience store. In order to mitigate the risk and assess the fit for purpose of the facility WOW asked "Axium Consulting Ltd." to conduct a technical due diligence. "Axium Consulting Ltd." is asking $350,000 as a fixed fee for its consulting services. The AGS will have a size of 3,000 square meters (sqm) and will require an initial investment of $80 million. As part of the initial investment, WOW will also have to invest additional $40 million in state of the art AI Robotics Technologies. It is believed that the AGS will be able to generate 10% more revenues compared to a traditional convenience store. The average annual sales per sqm of a traditional convenience store is $15,000. The AGS will generate revenue starting at the end of year 1 until the end of year 10. It will also incur additional working capital expenses of $5million immediately, this working capital will be recovered at the end of the project. It is believed that the AGS will reduce the revenues of a close grocery store that the company also own. The total impact on the annual revenues of this store is expected to be a reduction of $5 million. The management team is forecasting that operating costs will be only 15% of the incremental revenues from year 1-10. The initial investment will be depreciated on a straight-line basis over ten years to 0 book value. WOW has estimated that the AGS can be sold at the end of year 10 for $10 million. The tax rate is 30%. All cash flows are annual and are received at the end of the year. The weighted average cost of capital is 10%.
Required -
a) Calculate the FCFs for this project.
b) What is the NPV for the project?
c) What is the Discounted Payback Period?
d) What is the IRR?
e) Assume that the risk of investing in the AGS is higher than the overall risk of the company, what would happen to the discount rate and consequently NPV of the project? Why?
f) Suppose that WOW' management discounted payback rule is 5 years. Based on your analysis in b), c) and d) should the company undertake this project? Justify your answer with reference to theory. What other factor might affect the final decision?
Work-in-process 59,000. What amount should Lawson report as inventories in its statement of financial position
Show the changes in the related accounts that would appear in USC's balance sheets dated Dec. 31, Years 1 and 2, as well as in the income statements for the years ending Dec. 31, Year 1 and Year 2
What total amount should be credited to additional paid-in capital from common stock as a result of the conversion of the preferred stock into common stock
evaluate and interpret the condition numbers for a fx sqrtabsx-1 1 for x1.00001 b fx e -x for x10 c fx sqrtx2 1 - x
Based on this dialogue information, use the expanded risk model to determine a test of detailed risk. Really this risk to sample size determination.
Assess the importance of free cash flow in a growth company. Provide a brief scenario of a specific type of business that would benefit from free cash flow.
listed below are the transactions that affected the shareholders equity of branch-rickie coporation during the period
Sandhill Corporation has outstanding 21,000 shares of $5 par value common stock. Prepare Sandhill's journal entries to record these transactions
Given the income statement above, what are their tax bases in their shares at the end of year 1?
What is the best meaning for a chart of accounts? a list of the ledger accounts and their numbers arranged in ledger order./ a table resembling the equation
Victory Associates experienced the following accounting events during its 2013 accounting period.
in the manufacture of 9799 units of a product direct materials cost incurred was 148076 direct labor cost incurred was
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