Compute free cash flow that relies

Assignment Help Finance Basics
Reference no: EM131081295

The expected annual free cash flow for the GPS tracker investment from problem 3-1 is computed as follows:

Revenues 1,250,000

Variable cost 750,000

Fixed expenses 250,000

Gross profit 250,000

Depreciation 100,000

Net operating income 150,000

Income tax expense 51,000

NOPAT 99,000

Plus: depreciation 100,000


Less: working capital investment

Free cash flow 199,000

  • Construct a spreadsheet model to compute free cash flow that relies on the following assumptions or estimates:
  • What level of annual unit sales does it take for the investment to achieve a zero NPV? Use your spreadsheet model to answer this question. (Hint: Use the Goal Seek function in Excel.)
  • If unit sales were 15% higher than the base case, what unit price would it take for the investment to achieve a zero NPV?

Reference no: EM131081295

Intervals will contain the true mean

You expect that approximately 95 of these intervals will contain the true mean IQ (100) and approximately five of these intervals will not contain the true mean. Use simulat

Money market hedge on receivables

Suppose that Stevens Point Corporation has net receivables of 100,000 Singapore dollars in ninety days. The spot rate of the S$ is $.50, and the Singapore interest rate is 2 p

What is the value of the dividend that investors

The corporations pay no taxes and investors pay no taxes on capital gains, but pay a 30% income on dividends. What is the value of the dividend that investors expect corpora

What is the annuity payment amount

Calculating Annuities Due A 10-year annual annuity due with the first payment occurring at date t = 7 has a current value of $85,000. If the discount rate is 9 percent per y

Compounded value of annuity

You would like to start saving for retirement. Supposing you're now 20 years old and you want to retire at age 60, you've 40 years to watch your investment grow. Compute how

What will a share of stock sell for today

If the required return on Storico stock is 13 percent, what will a share of stock sell for today - What is the expected return on a portfolio that is equally invested in the

Innovation and the workplace-innovation and change

Critique the level of innovation in your workplace; include a brief description of your organization and your position. Is innovation encouraged? Provide examples to demonst

Differences between book value and liquidation value

Discusses the differences between book value, liquidation value, market value, and intrinsic value. Explain the three factors that determine the intrinsic, or economic, valu


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