You are trying to determine the financial break-even size for the follo
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Q: Does a decrease in the capital requirement ratio always cause anincrease in the value of operations?
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Q: Fill in the blank: Money market is the source of _________ finance.
A: Money market is a highly liquid and safe market consisting of negotiable instruments like treasury…
Q: If the firm borrows money at a significantly lower rate, this factor affects the firm's MARR. How?
A: If the firm borrows money at a lower rate then, MARR will also be lower.
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A: Payback technique helps us to compute the time period in which the project's cash inflows cover the…
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A: Following are the factors that lead to an increasing marginal cost of capital: The breakpoint of…
Q: Which ones identify the disadvantages of the payback rule? A. Very simple and easy to apply. B.…
A: Solution: Payback period is one of the decision making criteria in capital budgeting. It measures…
Q: What does the financial breakeven point shows?
A: A breakeven point is a situation of no loss no profit. The breakeven point is generally calculated…
Q: a. Which of these projects would you accept? Why? b. What is the cost of the capital rationing…
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Q: Short term investment decisions are also called as Select one: O a. Liquidity decision b. Finance…
A: Investment decisions can be both short term and long term
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A: Since you have posted multiple questions, we shall be solving the first one for you. In case you…
Q: What is the present breakeven point in revenues?
A:
Q: Do you think investors should practice dollar cost averaging when investing their money? Why or why…
A: Dollar-Cost Averaging: Dollar-Cost averaging is an investment approach that involves investing an…
Q: Define conservative approach (for short-term financing)
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Q: Consider the money market. What happens and why to interest rates during an economic expansion…
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Q: What is the major criticism of the payback and simple rate of return methods of making capital…
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Q: A change in money demand or a shift in the money demand curve is caused by a change in * the…
A: the increase demand of money shift the demand curve up.
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A: SOLUTION- CASH FLOW STATEMENT- IT IS A FINANCIAL STATEMENT THAT SUMMARIZES THE AMOUNT OF CASH AND…
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A:
Q: The minimum acceptable rate of return for an investment decision is called the;
A: A project to become acceptable shall be as such the costs shall be recovered completely.
Q: According to the Liquidity Preferences Model, these are the expected first impact (short run) coming…
A: Liquidity preference hypothesis could be a demonstrate that proposes that a speculator ought to…
Q: Is the financial breakeven point of a project the same as the crossover rate?
A: Crossover rate Crossover Rate is the weighted average cost of capital at which the Net present…
Q: How does an increase in the income rate affect the breakeven point?
A: Break-even sales is the dollar amount of revenue at which a business earns a profit of zero i.e. No…
Q: When considering the discount rate to use for discounting cash flows of a company project, we should…
A: Most common sources of finance are debt and equity.
Q: What affects the firm’s operating break-even point? Several factors affect a firm’s operating…
A: Given, Based on the scenarios described in the following table, indicate whether the mentioned…
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- Your new employer, Freeman Software, is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33.33%, 44.45%, 14.81%, and 7.41% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 1 cash flow? Equipment cost (depreciable basis) $65,000 Sales revenues, each year $60,000 Operating costs (excl. deprec.) $25,000 Tax rate 25.0% a. $36,869 b. $31,849 c. $35,114 d. $31,666 e. $33,442Wary Corporation is considering the purchase of a machine that would cost $335,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $48,000. The machine would reduce labor and other costs by $101,000 per year. The company requires a minimum pretax return of 10% on all investment projects. (Ignore income taxes.) Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Required: Determine the net present value of the project. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Net present valueDelta Products is considering a new 4-year expansion project that requires an initial fixed asset investment of $2.15 million. The fixed asset will be depreciated straight-line to zero over its 4-year life, after which time it will be worthless. The project is estimated to generate $2.23 million in profits per year. If the tax rate is 17%, what is the OCF for this project? (Do not round intermediate calculations and round your answer to the nearest whole dollar amount, e.g., 32.) OCF
- Harrison Company is considering taking on a project that requires an initial cost of $180,000. The project has a lifespan of two (2) years, after which after two years the project has no salvage value. The possible incremental after-tax cash flows and their probabilities can be seen in the following table. The required return by the company for this investment is 8%. Questions :a). The expected net present value of this projectb). If it is possible to abandon (abandonment) this project and the abandonment value at the end of the first year is $90,000 after tax. For this project, is abandonment of this project after one year is the right choice? Calculate the expected net present value, assuming that the company would abandon the project if it were useful. Compare with the calculations in the answer to part (a). What are the implications if you are a financial manager?Tree's Ice Cubes is considering a new three-year expansion project. The initial fixed asset investment will be $1.80 million and the fixed assets will be depreciated straight-line to zero over its three-year tax life, after which time the assets will be worthless. The annual sales of the project is estimated to be $1,005,000, with costs of $485,000. What is the OCF for this project, if the tax rate is 21 percent? (Do not round intermediate calculations.) Multiple Choice $536,800 $812,246 $544,200 $616,150 $746150You need to determine the viability of a project. The project will cost $650,000 today and have a life of 8 years. It has an unusal CCA rate of 14.0% and is expected to be sold for $100,000 at the end of the project's life. Annual sales revenue is expected to be $585,000 and annual costs are expected to be $465,000. The tax rate is 35.0% and the project's discount rate is 8.5%. Part A: Compute the NPV of the project and state whether you should proceed or not. Part B: Oops - the accountants made a mistake! The actual CCA rate is: 17.0%. Assuming all else is equal, compute the NPV of the project using the new CCA rate and state how much this improves or reduces the NPV of the project.
- The corner shop is considering a new four year expansion project that requires an initial fixed asset investment of 210000. The fixed asset will be depreciated straight line to zero over its four year life, after which time it will be worthless. The project is estimated to generate 48000 in annual sales, with costs of 31000. If the tax rate is 21 percent, what is the ocf for this project? .Mountain Frost is considering a new project with an initial cost of $205,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $20,000, $20,900, $24,600, and $16,900, respectively. What is the average accounting return? Please make sure its correct(Ignore income taxes in this problem.) Your Company is considering a project that would require an initial investment of $720,000 and would have a useful life of 8 years. The annual cash receipts would be $178,000 and the annual cash expenses would be $49,000. The salvage value of the assets used in the project would be $45,000. The company uses a discount rate of 10%. Compute the net present value of the project. a $145,590 b $250,645 c ($10,770) d ($31,785) e ($15,770)
- Alpha Zeta is considering purchasing some new equipment costing $390,000. The equipment will be depreciated on a straight line basis to zero book value over the four year life of the project. Projected net income for the four years is $18,900; $21,300; $26,700; and $25,000. What is the average accounting rate of return?Please solve it as soon as possible! . Consider an asset with an initial cost of $100,000 and no salvage value. Compute the difference in the present value of the tax shields if CCA is calculated at 20% declining balance compared to if CCA is calculated using a five-year, straight line write off. For your calculation use 30% as the tax rate and 16% as the required return. (The half-year rule applies.) The difference, to the nearest dollar, is A S1.724 B $4,129 C S4.483 d. 59,517 e.$49,969Almendarez Corporation is considering the purchase of a machine that would cost $150,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $18,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $39,000. The company requires a minimum pretax return of 13% on all investment projects. (Ignore income taxes.) Click here to view Exhibit 7B-1 and Exhibit 7B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the proposed project is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Multiple Choice $(45,000) Q Search (((( |個個