Briarcrest condiments npv

Assignment Help Accounting Basics
Reference no: EM13917138

Briarcrest Condiments NPV, Archer Daniels Midland NPV, Bell Mountain Vineyards NPV, Chip's Home Brew Whiskey Free Cash Flow FCF change with price increase , and Capital Co WACC
Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $1,976,521, have a life of five years, and would produce the cash flows shown in the following table.
Year Cash Flow
1 $397,441
2 -301,161
3 620,612
4 793,978
5 564,127

What is the NPV If the discount rate is 16.94 percent? (Enter negative amounts using negative sign e.g. -45.2$. Round answer to 2 decimal places, e.g. 15.25.)
NPV is

Question 2

Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $11.80 million. This investment will consist of $2.60 million for land and $9.20 million for trucks and other equipment. The land, all trucks, and all other equipment is expected to be sold at the end of 10 years at a price of $5.19 million, $2.47 million above book value. The farm is expected to produce revenue of $2.07 million each year, and annual cash flow from operations equals $1.94 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 10 percent. Calculate the NPV of this Investment. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)
NPV $
The project should be

Question 3

Bell Mountain Vineyards is considering updating its current manual accounting system with a high-end electronic system. While the new accounting system would save the company money, the cost of the system continues to decline. The Bell Mountain's opportunity cost of capital is 11.2 percent, and the costs and values c investments made at different times in the future are as follows:
Year Cost Value of Future Savings (at time of purchase) 0 $5,000 $7,000 1 4,450 7,000 2 3,900 7,000 3 3,350 7,000 2,800 7,000 5 2,250 7,000
Calculate the NPV of each choice. (Round answers to the nearest whole dollar, e.g. 5,275.) The NPV of each choice is:
NPV0 = $
NPV1= $
NPV2 = $
NPV3 = $
NPV4 = $
NPV5 = $
Suggest when should Bell Mountain buy the new accounting system?
Bell Mountain should purchase the system in

Question 4

Chip's Home Brew Whiskey management forecasts that if the firm sells each bottle of Snake-Bite for $20, then the demand for the product will be 15,000 bottles per year, whereas sales will be 83 percent as high If the price is raised 15 percent. Chip's variable cost per bottle is $10, and the total fixed cash cost for the year Is $100,000. Depreciation and amortization charges are $20,000, and the firm has a 30 percent marginal tax rate. Management anticipates an increased working capital need of $3,000 for the year. What will be the effect of the puce increase on the firm's FCF for the year? (Round answers to nearest whole dollar, e.g. 5,275.)
At $20 per bottle the Chip's FCF is $ ______ and at the new price Chip's FCF is $ _____

Question 5

Capital Co. has a capital structure, based on current market values, that consists of 40 percent debt, 3 percent preferred stock, and 57 percent common stock. If the returns required by investors are 11 percent, 11 percent, and 18 percent for the debt, preferred stock, and common stock, respectively, what is Capital's after-tax WACC7 Assume that the firm's marginal tax rate Is 40 percent. (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)
After tax WACC =

Reference no: EM13917138

Prepare breaker coprs collection budget for first quarter

Management at Breaker Corp. Expects an accounts receivable collecion pattern of 80 percent in the month of sale. 15 percent in the month after sale, and 5 percent in the sec

What amount was smith entitled to claim for realty taxes

In 2009, Smith paid $6,000 to the tax collector of Big City for realty taxes on a two-family house owned by Smith's mother. Of this amount, $2,800 covered back taxes for 200

Determine the net present value

An investment that costs $50,000 will return $15,000 operating cash flows per year for five years. Determine the net present value of the investment if the required rate of

Case study process of accounting

CASE STUDY (Process of Accounting). Rajiv and Rahul were twin brothers. Rajiv was interested in computers and would find time to always work on computers either at college o

The financial accounting standards board

One of Astro Company's activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much

Prepare beka companys journal entries to record the sale

Beka Company owns equipment that cost $50,000 when purchased on January 1, 2007. It has been depreciated using the straight-line method based on estimated salvage value of $5,

Deduction for state income taxes on federal return

On April 12, 2009, he files his state return for 2008 claiming a refund of $900. Ernest receives the refund on August 3, 2009. If Ernest itemizes deductions, how much may he

Current liability and long-term liability

At December 31, bonds payable of $100,000,000 are outstanding. The bonds pay 10% interest every September 30 and mature in installments of $25,000,000 every September 30, be

Reviews

Write a Review

 
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