Expected to result in additional cash flows

Assignment Help Financial Management
Reference no: EM131054642

Christopher Electronics bought new machinery for $5,120,000 million. This is expected to result in additional cash flows of $1,200,000 million over the next 7 years. What is the payback period for this project? Their acceptance period is five years.

Reference no: EM131054642

Questions Cloud

What is your rate of return on francesca industries : Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the stock is selling at $20 a share. The broker charges a 10 percent annual interest rate, and commissions are 3 percent of the stock value on the purchase and sale. ..
Uses payback period criteria of not accepting any project : AMP, Inc., has invested $2,165,800 on equipment. The firm uses payback period criteria of not accepting any project that takes more than four years to recover costs. The company anticipates cash flows of $454,386, $512,178, $564,255, $764,997, $816,5..
Coupon bonds repayment : Suppose your company needs to raise $39 million and you want to issue 25-year bonds for this purpose. Assume the required return on your bond issue will be 7 percent, and you’re evaluating two issue alternatives: A semiannual coupon bond with a coupo..
Cost of capital for those components before tax : Suppose a company has $31 in market value of equity, $58 in market value of preferred stock, $78 in outstanding bank term loans, and $78 of outstanding long term debt. if the cost of capital for those components before tax is 10.88%, 5.66%, 4.59%, an..
Expected to result in additional cash flows : Christopher Electronics bought new machinery for $5,120,000 million. This is expected to result in additional cash flows of $1,200,000 million over the next 7 years. What is the payback period for this project? Their acceptance period is five years.
Returns between willow stock and sky diamond stock : The covariance of the returns between Willow Stock and Sky Diamond Stock is 0.0860. The variance of Willow is 0.1440, and the variance of Sky Diamond is 0.1020. What is the correlation coefficient between the returns of the two stocks?
Cash flows-what is the irr for this project : Stone Sour, Inc., has a project with the following cash flows: Year Cash Flow 0 –$ 27,500 1 11,500 2 14,500 3 10,500 The required return is 16 percent. What is the IRR for this project?
What is the drg operating payment : A medical college of Virginia located in the urban city of Richmond, Virginia has a wage of 1.8579. a student from nearby Virginia Commonwealth university has just been treated for viral meningitis during a 5 day length of stay (LOS) DRG weight: 1.53..
Since limiting tax liability is goal of estate planning : Since limiting tax liability is a major goal of estate planning, there are various strategies that an estate planner can employ. In this discussion you explore these strategies and their impact on estate plans. Choose one strategy to limit estate tax..

Reviews

Write a Review

Financial Management Questions & Answers

  Based on the traditional net cost method

Nicole, age 25, is considering the purchase of a $20,000 participating ordinary life insurance policy. The annual premium is $248.60. Projected dividends over the first 20 years are $814. Based on the traditional net cost method, calculate the cost p..

  Approximate after-tax cost of debt for a new issue of bonds

The coupon rate on an issue of debt is 11%. The yield to maturity on this issue is 10%. The corporate tax rate is 37%. What would be the approximate after-tax cost of debt for a new issue of bonds?

  Increase production at the rate

Cooling Tools Inc. is currently producing 1,477 of small refrigerators per month but the company’s CEO plans to increase production at the rate of 11.00 percent per month until the firm is producing 6,476 of refrigerators per month. How many months w..

  Demonstrate a good understanding of the issues involved

`A market is efficient with respect to a particular set of information if it is impossible to make abnormal profits by using this set of information to formulate buying and selling decisions.'

  Analyzing the after-tax cost of debt for firm

You are analyzing the after-tax cost of debt for a firm. You know that the firm’s 12-year maturity, 10.60 percent semi-annual coupon bonds are selling at a price of $1,034.33. These bonds are the only debt outstanding for the firm. What is the after-..

  What should the share price be in one year

A share of stock sells for $44 today. The beta of the stock is 1.6, and the expected return on the market is 12 percent. The stock is expected to pay a dividend of $.70 in one year. If the risk-free rate is 4.3 percent, what should the share price be..

  Use of financial data in strategic decision-making

Review the financial data - The company has narrowed the choice to the following two alternatives, with the cash flow information being available - Post an explanation of the tools that you believe would help you to reach a decision. If you were a..

  Change in the bonds price in dollars and percentage terms

A $1,700 face value corporate bond with a 5.6 percent coupon (paid semiannually) has 12 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 7.9 percent. The firm has recently gotten into some trouble and the rating ag..

  Bonds make semiannual coupon payments

Trevor Price bought 10-year bonds issued by Harvest Foods five years ago for $914.46. The bonds make semiannual coupon payments at a rate of 8.4 percent. If the current price of the bonds is $1,001.17, what is the yield that Trevor would earn by sell..

  The company pledges to increase its dividend

Caan Corporation will pay a $2.54 per share dividend next year. The company pledges to increase its dividend by 3.5 percent per year indefinitely. If you require a return of 11 percent on your investment, how much will you pay for the company’s stock..

  Two stocks to be correctly priced relative to each other

Stock Y has a beta of 1.35 and an expected return of 14.3 percent. Stock Z has a beta of 0.8 and an expected return of 10.7 percent. Required: What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?

  Used to understand the volatility of the stocks

Wall Mart Beta can be used to understand the volatility of the stocks. Understanding volatility is important for a better understand of the risks taken at any one time and not taking on more or less risk than originally planned.  Understanding volati..

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd