Reference no: EM131387438
Q 1. Working capital impact on project. iCovers, Incorporated wants to make covers for all the products that Apple manufactures. The company is looking at new covers for the iPhone, iPad, iPalm, iThumb, and iEye. The initial investment in capital equipment will be $10,000,000. The projected revenues and costs are:
Revenue
|
$10,000,000
|
$13,000,000
|
$17,000,000
|
$23,000,000
|
$18,000,000
|
$12,000,000
|
Variable
|
$ 4,000,000
|
$ 5,200,000
|
$ 6,800,000
|
$ 9,200,000
|
$ 7,200,000
|
$ 4,800,000
|
Fixed
|
$ 1,500,000
|
$ 1,500,000
|
$ 1,500,000
|
$ 1,500,000
|
$ 1,500,000
|
$ 1,500,000
|
S, G & A
|
$ 1,250,000
|
$ 1,400,000
|
$ 1,750,000
|
$ 2,000,000
|
$ 2,000,000
|
$ 1,500,000
|
The initial investment in working capital is $2,000,000. However, working capital will increase or decrease each year so that it is always 20% of the anticipated revenue for the coming year. The equipment will be depreciated using a MACRS five-year life, and there is no salvage value for the equipment at the end of the six-year project. The tax rate for iCovers is 37%.
Using a spreadsheet, set up the project's incremental cash flows showing the initial outlay (both capital and working capital), the operating cash flow each year, and the change in working capital each year. Note that the company will terminate the project in year six. Then calculate the project's IRR and NPV if the project's discount rate is 14%.
Describe the taylor rule-full-employment level
: Describe the taylor rule. if the fed were the following rule, what would the nominal Fed funds rate be if inflation over the past year were 4% and output were 1% below its full-employment level? assume that the inflation target and equilibrium real i..
|
A certificate of authority from state m result
: Riley fails to pay for the goods, and when Amalgamated Corporation sues Riley in a court of State M, Riley defends on the ground that Amalgamated Corporation does not possess a certificate of authority from State M. Result?
|
Price setting model of oligopolists selling differentiated
: One problem with the Bertrand price setting model of oligopolists selling differentiated products is that the profit function is discontinuous. Consumers would generally prefer that strategic oligopolists engage in sequential as opposed to simultaneo..
|
Will law firm be prevented from collecting on contract
: Dr. North, a surgeon practicing in Georgia, engaged an Arizona professional corporation consisting of twenty lawyers to represent him in a dispute with a Georgia hospital. Will the law firm be prevented from collecting on the contract? Explain.
|
Calculate the projects irr and npv
: The initial investment in working capital is $2,000,000. Note that the company will terminate the project in year six. Then calculate the project's IRR and NPV if the project's discount rate is 14%.
|
Wagner or national labor relations act
: Support your view with at least one reference Please interact with two of your classmates.
|
Explain should the injunction be issued
: Burke now seeks to enjoin the secretary of state from revoking its authority to do business in Arkansas. Should the injunction be issued? Explain.
|
Identify potential points of conflict or concern
: Outline specific points to be addressed in the company's corporate code of conduct. Identify potential points of conflict or concern and provide a recommendation for resolving the conflict or concern. Justify your points.
|
What is the herfindahl-hirschman index for widget industry
: The widget industry is comprised of six firms of varying sizes. Firm 1 has 35 percent of the market. Firm 2 has 25 percent, and the remaining firms have 10 percent each. What is the Herfindahl-Hirschman index for the widget industry? Based on the U.S..
|