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!
Barclay Polymers needs to acquire a new extruding machine whose purchase price is $600,000. However, the firm could lease the extruder from Primal Leasing Corporation for a 5-year period aand make annual payments of $115,000 at the beginning of the year. If the extruder is leased, then Primal Leasing Corporation would pay all maintenance costs and Barclay would have the opportunity to purchase the asset for $130,000 at the beginning of year 5. If the extruder is purchased by Barclay, then it will be financed with a 5-year loan at an annual rate of 8.75%. Barclay would use the MARCS depreciation method over a 5-year recovery period, would purchase a service contract for $8,000 a year, and would keep the extruder after its recovery period. If the firm pursues the purchase alternative, then it would secure a maintenance contract at an expense of $3,000 annually. The firm is in a 35% tax bracket.
1. Calculate the annual after-tax cash outflow for the leasing alretnative.
2. Determine the annual interest and principal payments for the purchase alternative.
3. Determine the annual depreciation deduction for the purchase alternative.
4. Calculate the net present value of both the leasing and the purchase alternatives. Which method should Barclay Polymers use to obtain the extruder?
A project has a discount rate of 14 percent, an initial cost of $99,200, an inflow of $56,400 in year 1 and an inflow of $75,900 in year 2. Your boss requires that every project return a minimum of $1.06 for every $1 invested. Based on this informati..
The 3 month euro dollar futures price for a contract maturing in 6 years is quoted as 95.20. The standard deviation of the change in the short-term interest rate in 1 year is 1.1%. Estimate the forward LIBOR interest rate for the period between 6.00 ..
Seth borrows $1000 at 5% for 20 years from Sojourner. After 10 years, Sojourner sells the rights to future payments to Johnathon for $P. Find P, if Johnathon plans to accumulate a sinking fund at 4% to replace P and desires a yield of 6%. Find the yi..
Suppose your firm wanted to expand into a new line of business quickly through an existing division of the firm, and that management anticipated that the new line of business would constitute over 80 percent of your firm’s operations within three yea..
The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). a. Suppose that today you buy a bond ..
Today is your birthday and you decide to start saving for college. You will begin college on your 18th birthday and will need $10,000 per year at the end of each of the next 4 years (after that 18th birthday - isn't it nice the college lets you pay a..
Filer Manufacturing has 8 million shares of common stock outstanding. The current share price is $80, and the book value per share is $7. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $75 million, ..
JJ Industries will pay a regular dividend of $0.75 per share for each of the next four years. At the end of four years, the company will also pay out a liquidating dividend. If the discount rate is 12 percent, and the current share price is $75, what..
For a 4 person surgical group, what kind of formula may be devised to fairly and consistently measure and reward productivity? What changes may be needed if one surgeon decides to perform more office work and less surgery?
Find the modified internal rate of return (MIRR) for the following series of future cash flows if the company is able to reinvest cash flows received from the project at an annual rate of 11.57 percent. The initial outlay is $496,600.
Cost of Common Equity and WACC Patton Paints Corporation has a target capital structure of 30% debt and 70% common equity, with no preferred stock. Its before-tax cost of debt is 11% and its marginal tax rate is 40%. The current stock price is P0 = $..
Suppose a stock had an initial price of $96 per share, paid a dividend of $2.70 per share during the year, and had an ending share price of $77.50. Compute the percentage total return. What was the dividend yield? What was the capital gains yield?
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