Reference no: EM131060865
Your company is investigating the opportunity to produce MP3 players. The equipment required for the project initially costs $1,800,000 and will be depreciated on a straight line to $400,000 (not to zero) over the 4 year life of the project. The project manager actually believes that the equipment could be salvaged for $200,000 at the end of the life of the project. The firm's marginal tax rate is 20% but the average tax rate is 27%. The marketing department and production operations department have estimated the following:
Forecast Sales per Year 120,000 units
Forecast Price per Unit $43
Forecast Variable Cost per Unit $29
Forecast Fixed Costs per Year $510,000
Part A: What is the after-tax salvage value of the equipment?
$400,000
$200,000
$261,000
$240,000
$219,000
Part B: What is the Operating Cash Flow (OCF) per year?
$496,000
$936,000
$40,000
$1,006,000
$1,516,000
Part C: Assume the company sells 140,001 units instead of 140,000. What is the marginal profit of selling that extra unit?
$14
$13
$43
$1,680,000
$29
Part D: The project requires the company to immediately increase inventory by $130,000, and accounts payable will also immediately increase by $90,000. All investments in net working capital will be reversed at the end of the life of the project. What is the initial investment in Net Working Capital?
$130,000
$40,000
$90,000
-$50,000
-$30,000
What is the expected year-end dividend
: Francis Inc.'s stock has a required rate of return of 12.50%, and it sells for $57.50 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend, D1?
|
Find the conditional distributions of birth region
: What is the population under consideration and what are the two variables under consideration and find the conditional distributions of birth region.
|
What was total dollar return on this stock
: Beverly Frickel purchased 100 shares of Gleason Systems stock for $32.50 per share. Her commission for this purchase was $25. She sold the stock 2 years later for $45 per share and a commission of $40. While she held the stock it paid a dividend of $..
|
Research external environmental trends
: External environment trends are typically identified within major categories, such as political, regulatory, social-demographic-lifestyle, technology, and so on. When these individual trends collide or converge, they can emerge as mega-trends, or ..
|
What is the after-tax salvage value of the equipment
: Your company is investigating the opportunity to produce MP3 players. The equipment required for the project initially costs $1,800,000 and will be depreciated on a straight line to $400,000 (not to zero) over the 4 year life of the project. What is ..
|
What is the maximum normal strain e at the top and bottom
: What is the maximum normal strain ε at the top and bottom of the bar?
|
What is the p-value for your sample group
: You have explained the general steps well for this process. Can you include some specific values? What is the specific amount of time that you would like to study with your hypothesis test? What is the p-value for your sample group?
|
Stop repurchasing and will issue dividends totaling
: Tolo Co. Plans the following repurchases: $10.4 million in one year, nothing in two year, and $20.1 million in three years. After that, it will stop repurchasing and will issue dividends totaling $24.3 million in four years. The total paid in dividen..
|
Customer value action item
: You are hired by an airline company that is seeking to increase its market presence in Latin America and Asia. One of the many job responsibilities that you will be tasked to complete will be to support your boss in the emerging markets. She has a..
|