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!
1) Suppose you sell a fixed asset for $50,000 when its book value is $60,000. If your company's marginal tax rate is 40%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?
2) Your company has spent $500,000 on research to develop a new computer game. The firm is planning to spend $100,000 on a machine to produce the new game. Shipping and installation costs of the machine will be capitalized and depreciated; they total $5,000. The machine has an expected life of 3 years, a $100,000 estimated resale value, and falls under the MACRS 5-Year class life. Revenue from the new game is expected to be $500,000 per year, with costs of $200,000 per year. The firm has a tax rate of 35 percent, an opportunity cost of capital of 10 percent, and it expects net working capital to increase by $100,000 at the beginning of the project. What will be the net cash flow for year one of this project?
Sales $500,000
Fixed Costs - 200,000
Depreciation - 21,000
EBIT $279,000
Taxes - 97,650
Net Income $181,350
Depreciation 21,000
Cash Flow $202,350
Are there margin requirements for the following positions? Explain why or why not. a. Buy an interest rate cap b. Sell a put option on Eurodollar futures c. Sell an interest rate floor d. Sell a Eurodollar futures contract
Debreu Beverages has an optimal capital structure that is 70% common equity, 20% debt, and 10% preferred stock. Debreu's pre-tax cost of equity is 9%. Its pre-tax cost of preferred equity is 7%, and its pre-tax cost of debt is also 5%. If the corpora..
Fee Founders has perpetual preferred stock outstanding that sells for $40.00 a share and pays a dividend of $5.00 at the end of each year. What is the required rate of return?
Should we care about executive compensation or how much hedge fund managers earn? How should incentive compensation be changed? Should it be changed? Who can change it? Southwest Airline's CFO hedged fuel prices and saved the company hundreds of mill..
Ralph buys perpetuity immediate paying 60 annually. He deposits the payments into a savings account earning interest at an annual effective rate of 4%. Fifteen years later, after receiving the 15th payment, Ralph sells the perpetuity based on an effe..
Use the information below to determine before tax-costs of debt financing of bond S:
Jones Design wishes to estimate the value of its out-standing preferred stock. The preferred issue has an $80 par value and has a dividend rate of 8 percent. Similar-risk preferred stocks are currently earning a 12% annual rate of return. What is the..
What kind of strategy would you recommend for Xiaomi’s international expansion? Would you recommend product standardization or localization?
Better Mousetraps has developed a new trap. It can go into production for an initial investment in equipment of $5.4 million. The equipment will be depreciated straight line over 6 years to a value of zero, but in fact it can be sold after 6 years fo..
The existence of just four large CPA firms that service virtually all of the major industrial and financial companies and thus dominate the accounting profession has led to criticism through the years. What dangers do you see from the dominance of a ..
It is May 1, and the quoted price of a bond with an Actual/365 day count and 8% per annum coupon in the United States is 104. It has a face value of 100 and pays coupons on April 1 and October 1. What is the cash price rounded to the nearest whole nu..
Is there really any difference between the different ways one can mitigate exchange rate risk? If so, is one form of exchange rate risk mitigation superior to another? Defend answer
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