Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Choosing Among Alternatives and detail your work in the answer to each question in a Word document and/or Excel spreadsheetBauer Industries is an automobile manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks. Bauer plans to use a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental free cash flow projections (in millions of dollars):Year 0 Years 1-9 Year 10Revenues- Manufacturing expenses (other than depreciation)- Marketing expenses- Depreciation100.0-35.0-10.0-15.0 100.0-35.0-10.0-15.0= EBIT- Taxes (35%)40.0-14.0 40.0-14.0= Unlevered net income+ Depreciation- Increases in net working capital- Capital expenditures+ Continuation value-150.026.0+15.0-5.026.0+15.0-5.0+12.0
Free cash flow -150.0 36.0 48.0a. For this base-case scenario, what is the NPV of the plant to manufacture lightweight trucks?b. Based on input from the marketing department, Bauer is uncertain about its revenue forecast. In particular, management would like to examine the sensitivity of the NPV to the revenue assumptions. What is the NPV of this project if revenues are 10% higher than forecast? What is the NPV if revenues are 10% lower than forecast?c. Rather than assuming that cash flows for this project are constant, management would like to explore the sensitivity of its analysis to possible growth in revenues and operating expenses. Specifically, management would like to assume that revenues, manufacturing expenses, and marketing expenses are as given in the table for year 1 and grow by 2% per year every year starting in year 2. Management also plans to assume that the initial capital expenditures (and therefore depreciation), additions to working capital, and continuation value remain as initially specified in the table. What is the NPV of this project under these alternative assumptions? How does the NPV change if the revenues and operating expenses grow by 5% per year rather than by 2%?d. To examine the sensitivity of this project to the discount rate, management would like to compute the NPV for different discount rates. Create a graph, with the discount rate on the x-axis and the NPV on the y-axis, for discount rates ranging from 5% to 30%. For what ranges of discount rates does the project have a positive NPV?
A building contractor took a contract for the construction of a certain building on 1st January 1994. The contract price was agreed at Rs 4,00,000. The contractor had made the following expenditure during the year.
Does your support department give significant support to other support departments, and does it receive important support from other support departments?
1 employees are paid bi-monthly on the 1st day of the month for work performed during the last half of the last month
Make the necessary adjusting entries - the equipment has an estimated useful life of nine years and a salvage value of $1,000. Depreciation is calculated using the straight-line method.
question 1scores are obtained from law school admission test are normally distributed with a mean score of 550 and a
Compute the current ratio for each company and which company has the greater likelihood of being able to pay its bills?
Describe the objectives, standards of comparison, sources of information, and compensation issues in measuring financial performance and apply horizontal analysis, trend analysis, vertical analysis, and ratio analysis to financial statements.
q reorganization gain loss and basis determinationtarget corporation holds assets with a fair market value of
questionon 1st december 2009 twilight corporation decided upon a plan to issue to its ceo one share of its 1 par common
Evaluate the annual depreciation on the new equipment that could be provided for the fiscal year beginning 1 st June, 2014.
Assume that the cost of goods sold and variable operating expenses vary directly with sales and that income taxes remain at 30 percent of operating income.
Calculate the aimed profit percentages for the three products and under the full absorption costing method, with overhead costs absorbed on the basis of direct labour hours.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd