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!
CHROMEX PLC
Payback period
Payback period must be based on cash flows that is the cash generated from operations and the capital invested by Chromex. Profit is different from cash flow to the extent that depreciation has been charged in the accounts. The sum inward from the sale of assets merely reduces the size of the capital investment.
This gives the following statistics for the payback calculation assuming that no further reinvestment in plant is required
Investment Cost = $150 million - $10 million = $140 million
If the labour cost savings are mistreated Annual Cash flows from Bexell's operations post take over = $10 million + $0.5 million = $10.5 million Payback period (in years) = 140/10.5 = 13.33 years or 13 years 4 months This is a conservative approximation in that it ignores the possible cash flow effects of the anticipated operating savings from reduced labour costs. If the savings are supposed to have a cash flow value of $700000 this gives an adjusted figure for cash flow as follows
Annual cash flow = $ 10.5 million + $0.7 million = $11.2 million
Payback period is thus equal to
140/112= 12.5 years or 12 years and 6 months
The insertion of the labour cost savings so reduces the payback period by 10 months.
The price of the embedded option comprises two components. The first is the value of the same bond assuming it has no embedded option (option-free bond), th
Q. What do you signify by Cost of Capital? What do you signify by 'Cost of Capital'? What is its meaning and what are the problems in determination of cost of capital? Ans.
A campany estimate a cash requirment of 900000 the opportunity interst eate is 9% per anual the transaction cost for borrowing or withdrawing fund is 264.5
Advantages and Disadvantages of Investing in Gilts Advantages As the security is issued by the GOI, it has a minimal default risk. Investors have the opportunity to inves
Can Engineering Tech effectively protect its interests and assure payment?
An individual agent thinks that there is a high probability that the Dow Jones will have a payoff (or points) between a=10000 and b=12000 at t=1. Design a digital option (see Fi
Types of Efficiency Efficient market theory can be described in three ways: 1) Allocative Efficiency: A market is allocatively proficient when it directs savings tow
Define the balance of payments. Answer: The balance of payments that is abbreviated as BOP can be defined as the statistical record of a country’s international transactions ove
What is the decision rule for accepting or rejecting proposed projects when using net present value? When going with the net present value decision rule any project with a net
Derivatives - Financial instruments whose value varies with value of an underlying asset (like a stock, BOND, commodity or currency) or index like interest rates. Financial instrum
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd