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Consider a project to supply Detroit with 42,000 tons of machine screws annually for automobile production. You will need an initial $1,848,000 investment in threading equipment to get the project started; the project will last for 6 years. The accounting department estimates that annual fixed costs will be $546,000 and that variable costs should be $210 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 6-year project life.
It also estimates a salvage value of $584,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $290 per ton. The engineering department estimates you will need an initial net working capital investment of $546,000. You require a 10 percent return and face a marginal tax rate of 39 percent on this project.
Suppose you believe that the accounting department's initial cost and salvage value projections are accurate only to within ±14 percent; the marketing department's price estimate is accurate only to within ±11 percent; and the engineering department's net working capital estimate is accurate only to within ±7 percent. What are the Best and Worst case NPVs?
Its balance sheet shows $110 million in notes payable, $90 million in long-term debt, $20 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 25 million shares of stock outstan..
briefly explain the purpose of a balance sheet and analyze Ford Motor Company's balance sheet from its 2012 Annual Report.
Your portfolio consists of $50,000 invested in Stock X and $50,000 invested in Stock Y. Both stocks have an expected return of 15 percent, a beta of 1.6, and a standard deviation of 30 percent.
The Corporation had declining sales and rising expenses over the last decade and expects this trend to continue. As a result, company predicts that earnings and dividends will decline indefinitely at a rate of 4 percent per year.
Beckman, Inc., purchases 60 percent of the outstanding stock of Calvin for $36,000. Calvin Corporation has one recorded asset, a specialized production machine with a book value of $10,000.
Your firm is cash-based. Ignore any income tax implications. Determine the consequences of this transaction for each of the following.
joe has two children sydney age 5 and william age 2 that he wants to provide for their education funding. currently
why do some investors prefer high-dividend-paying stocks while other investors prefer stocks that pay low or
Trying to find how to calculate the effective annual interest rate on commercial paper when business sold an issue of 30-day paper with fact value of $5,000,000 and the frim received $4,958,000.
year-to-date oracle had earned a 1.40 percent return. during the same time period valero energy earned 7.68 percent and
bradford manufacturing company has a beta of 1.45 while farley industries has a beta of 0.85. the required return on an
Han Corporation sales last year were $395,000, and its year-end receivables were $52,500. The company sells on terms that call for customers to pay 30 days after the buy,
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