FINANCIAL ANALYSIS

1. My firm is considering replacing old equipment with a new, more efficient model. The old equipment bought three years ago for $100,000, has a 5 - year MACRS life and can be sold for $50,000 or used for three more years when its resale value will be zero. The new equipment will cost $210,000, will have a three-year MACRS recovery period and will have a resale value of $20,000 after three years when the project will end. The new equipment will increase revenue before taxes by $25,000 and decrease costs before taxes by $50,000 per year. The firm's tax rate is 40%, and the discount rate is 16%.

a) Calculate the depreciation for the old and new equipment for each year of their depreciable life.

b) Determine the net cash proceeds from the disposal of the old and new equipment.

c) Determine Cash Flows (Cfs) for the initial investment, operating life, and terminal point. Prepare a time line showing the CFs.

d) What is the NPV of this replacement?

e) What is the resale value of the new equipment that would make you indifferent about the project?

f) What is the discount rate that would make you indifferent about the project?

## Present value concept and calculating present valueAssume you're to receive the stream of annual payments (also called an "annuity") of $9000 every year for three years starting this year. The discount rate is 6%. What is the present value of such three payments? |

## Describe pricing decisionsDescribe Pricing Decisions where a little reflection shows that this statement is off-target and provide an argument demonstrating why it is incorrect |

## Computation of the internal rate of return of capitalComputation of the Internal rate of Return of capital project and What is the IRR for the following project if its initial cost |

## Calculation of price of preferred stock with given data''sCalculation of price of preferred stock with given data's and Compute the price of the preferred stock |

## Computing the standard deviation for treasury billsComputing the standard deviation for treasury bills and Calculate the standard deviation of Treasury bill returns and inflation over this period |

## What is labour costWhat is Labour Cost and the information technology shop of Glob us Enterprises is developing software to control the manufacturing processes of a chemical plant |

## Computation of current yield of the bondComputation of current yield of the bond and they pay interest annually and have a 9% coupon rate |

## Calculate the value of perpetuityCalculate the value of perpetuity and With Same amount of money what rate compounded semi-annually equate when the same amount compound at quarterly rate of 5.5% |

## Future value-annuity versus annuity dueFind out the future value of 7 percent, 5-year ordinary annuity which pays $300 each year? |

## Describe analyzing company''s working capital managementDescribe Analyzing company's working capital management and describe why the company's operating and cash cycles are or are not optimized |

## Risk as well as return analysis of a short term investmentRisk as well as return analysis of a short term investment and Federal and state taxes will be paid on CD but only federal will be paid on Treasury bill |

## Computation of earnings as interest on interestComputation of earnings as interest on interest and How much will you accumulate in your account after 10 years |

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