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Pappy’s Potato has come up with a new product, the Potato Pet (they are freeze-dried to last longer). Pappy’s paid $127,000 for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $582,000 per year. The fixed costs associated with this will be $186,000 per year, and variable costs will amount to 22 percent of sales. The equipment necessary for production of the Potato Pet will cost $634,000 and will be depreciated in a straight-line manner for the four years of the product life (as with all fads, it is felt the sales will end quickly). This is the only initial cost for the production. Pappy's has a tax rate of 30 percent and a required return of 12 percent.
Calculate the payback period for this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Payback period ___years
Calculate the NPV for this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV $____ Calculate the IRR for this project. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
IRR ___?
What arbitrage opportunity is available for an investment banking firm? What is the profit on the activity?
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what is the return on equity of the margin position after one year falls to $80? at what price would you receive a margin call?
Dividends are expected to grow at 28 percent per year during the next three years, What is the projected dividend for the coming year?
Your investment club has only two stocks in its portfolio; $45,000 is invested in a stock with a beta of 0.4, and $45,000 is invested in a stock with a beta of 1.4. What is the portfolio's beta?
The PARC Company, a large profitable corporation, has decided to purchase a new widget machine. The following cost data concerning the widget machine have been provided. First cost = $3,156,000. Salvage value = $119,000. Life = 10 Years. Direct purch..
A child who is receiving services from a child protection agency due to physical abuse is referred to a school social worker due to bullying behavior.
The company is using Economic Order Quantity model in placing the orders. Calculate Economic Order Quantity.
Calculate Basic and Diluted Earnings Per Share. Compute to Walgreens (for the last 5 years) and the industry average (for the current year).
A loan at 4% effective interest per year is repaid 12 annual installments. Find the loan balance immediately after the first $300 payment.
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