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A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 45% of sales. Indirect incremental costs are estimated at $95,000 a year. The project requires a new plant that will cost a total of $1,500,000, which will be a depreciated straight line over the next 5 years. The new line will also require an additional net investment in inventory and receivables in the amount of $200,000.Assume there is no need for additional investment in building the land for the project. The firm's marginal tax rate is 35%, and its cost of capital is 10%. To receive full credit on this assignment, please show all work, including formulae and calculations used to arrive at financial values.
By using above information, what weighted-average direct manufacturing labour rate must you use in making your manufacturing direct labour cost objective?
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What annual probability of default would be consistent with the yield to maturity of these bonds in mid-2009 and would you base your estimate of XYZ's equity cost of capital on your answer in part (a) or in part (d)? How does your answer to part (c)..
Disucss and explain the financial strategy that your selected organization has created to manage your selected contemporary issue.
In which payment are the principal and the interest most nearly equal to each other?
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John Keene recently invested $2,566.70 in a project that is promising to return 12 percent per year. The cash flows are expected to be as follows.
What are the appropriate loan rates for each customer?
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If the firm follows a maturity matching (or moderate) working capital financing policy, what is the most likely total of long-term debt plus equity capital.
Which are the 3 most significant variables which determine the level of country risk? When is country risk analysis a critical factor for a business going global?
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