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The management of Casilla Manufacturing Company (CMC) has decided to invest in a new robotic system to increase the productivity of the company. The company has enough money to invest in one system, and has narrowed the choice down to Asea System and Bsea System. Asea System requires an up-front cost of $100,000 and then generates positive after-tax cash flows of $60,000 at the end of each of the next two years. The Asea system can be replaced every two years with the cash inflows and outflows remaining the same. Bsea System also requires an up-front cost of $100,000 and then generates positive after-tax cash flows of $48,000 at the end of each of the next three years. Bsea System can be replaced every three years, but each time the system is replaced, both the cash inflows and outflows increase by 10 percent. The company needs a system for the six years, after which time the management plans on liquidating the company. The company's cost of capital is 11 percent. What is the NPV of each system (on a six-year extended basis)? Which system creates the most value to the company? Show your work step by step. Please be clean and neat. Explain, in words, the approach that you have used to solve this problem in 5 lines
A recommended technique to ensure the accuracy of translation a company’s documents into other languages. Which of the following countries had the highest per capita GDP (ppp)? There are five identifiable stages in the evolution of marketing across ..
ABC Co. generated $15.1 billion in sales last fiscal year. At FYE, ABC’s balance sheet showed that the company has $12 billion in total assets, of which $7.3 are current assets. Its balance sheet further shows $2.5 billion in current liabilities, $3 ..
Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $27,000 per month for 25 years, with the first payment received 30 years and 1 month from now. He can af..
The Needed Corp has current assets of $2.8 million and current liabilities of $1 million. The firm needs additional inventories and can obtain these inventories by financing them with short-term notes (a current liability). how much additional invent..
Both warrants and convertibles are types of option securities. Warrants bring in additional funds when exercised, while convertibles do not. Return on Assets will fall after a Convertible Bond is exchanged for equity.
What is portfolio theory and why is it important to investing behavior?
A firm has an operating profit of $300.000 interest of %35,000 dividends of $6000. There are 400 outstanding common stocks and a tax rate of 40 percent. The firm has an after tax cost of debt of 5 percent and cost of equity of 15 percent. the firms t..
Find the value of a share of preferred stock that pays $6.00 per year given a required return of 16%.
Copper company CCT has three million common shares outstanding and perpetual debt with a market value of $30 million. Its interest rate is 8%, and its corporate tax rate is 40%. Its levered beta is 1.2. The risk-free rate is 3% and the market portfol..
First Simple Bank pays 8.5 percent simple interest on its investment accounts. First Complex Bank pays interest on its accounts compounded annually. What rate should the bank set if it wants to match First Simple Bank over an investment horizon of 15..
2013 balance sheet showed Current assets of $68,000 and Current Liabilities of $59,000. The 2014, balance sheet shows Current assets of $54,000 and Current Liabilities of $65,000. What was the company’s change in net working capital (NWC)?
On a typical day,U.C. Stars Vision Center writes $50,000 in checks, which take four days to clear. They receive an average of $60,000 in checks from patients on a daily basis, which take five days to clear. What is U.C.’s disbursement float? What is ..
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