Reference no: EM131027036
A company is purchasing a new machine which will cost $130,000 with additional shipping costs of $5,000 and set up and installation costs of $12,000.
An additional $8,000 in Net Working Capital will be required.
Project life is five (5) years.
The project will increase revenues by $90,000 each year and operating costs will increase by $32,000 annually.
The machine has a class life of seven (7) years and will be depreciated using the straight line method.
The company will sell the machinery for $50,000 at the end of five years.
The company’s cost of capital is 12% and the marginal tax rate is 34%.
Calculate the total cash flows (operational and Nonoperational) for the last year of the project.
$109,351
$100,700
$78,241
$98,276
Sector fund specializing in commercial bank stocks
: A sector fund specializing in commercial bank stocks had average daily assets of $3.4 billion during the year. This fund sold $1.25 billion worth of stock during the year, and its turnover ratio was .42. How much stock did this mutual fund purchase d..
|
Determine the equivalent uniform annual worth
: A company plans to invest $20,000 dollars are new equipment to reduce operating costs. It is estimated that the savings will be $7,000 per year for the 6 year life of the equipment. Determine the equivalent uniform annual worth (EUAW) of the equipmen..
|
Interest rate parity in calculating the expected spot rates
: You are evaluating a proposed expansion of an existing subsidiary located in Switzerland. The cost of the expansion would be SF 18 million. The cash flows from the project would be sf 5.5 million per year for the next five years. Use the approximate ..
|
Capitalization increase or decrease shareholder wealth
: Barns Brother's capital structure is 100% equity and 0% debt. Currently there are 100,000 shares of common stock outstanding. Barns has decided to change its capital structure by buying back shares of common stock in a recapitalization effort. How mu..
|
Calculate total cash flows operational and nonoperational
: A company is purchasing a new machine which will cost $130,000 with additional shipping costs of $5,000 and set up and installation costs of $12,000. An additional $8,000 in Net Working Capital will be required. Calculate the total cash flows (operat..
|
For nominal bond returns
: Over the last 111 years, 1981 was the top year for nominal bill returns, and 1982 was the top year for nominal bond returns. Why do you think that these two years saw such high returns on bonds and bills? Research the interest rate environment during..
|
About british laws as applied to workplace surveillance
: The article is talking about British laws as applied to workplace surveillance. Do you think that similar laws can work in the US to give more protection to employees? The article raises the question of consent from employees to be monitored. Do you ..
|
Time to reach a financial goal
: You have $39,351.04 in a brokerage account, and you plan to deposit an additional $4,000 at the end of every future year until your account totals $290,000. You expect to earn 11% annually on the account. How many years will it take to reach your goa..
|
What is estimated intrinsic stock price
: Burns & Kennedy Corporation (BK) has a value of operations equal to $2,100, short-term investments of $100, debt of $200, and 100 shares of stock. a. What is BK’s estimated intrinsic stock price? b. If BK converts its short-term investments to cash a..
|