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Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $23,000, whereas the gas-powered truck will cost $17,100. The cost of capital that applies to both investments is 11%. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,500 per year and those for the gas-powered truck will be $4,950 per year. Annual net cash flows include depreciation expenses. Calculate the NPV for each type of truck. Round your answers to the nearest dollar. Electric-powered truck $ ________ Gas-powered truck $ ________ Calculate the IRR for each type of truck. Round your answers to two decimal places. Electric-powered truck ________ % Gas-powered truck ________ % Which type of the truck should the firm purchase? _________________
The past five monthly returns for Kohl’s are 3.82 percent, 4.32 percent, −1.96 percent, 9.39 percent, and −2.84 percent. Compute the standard deviation of Kohls’ monthly returns.
Grenville common stock had a 12.25 percent rate of return last year. The fixed annual dividend is $.65 a share, which equates to a dividend yield of 1.6 percent. What was the rate of price appreciation on the stock?
A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent ..
A company's 7% coupon rate, semiannual payment, $1,000 par value bond that matures in 30 years sells at a price of $657.02. The company's federal-plus-state tax rate is 30%. What is the firm's after-tax component cost of debt for purposes of calculat..
A 25-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 8%. a. What is the bond’s yield to maturity if the bond is selling for $1,010? Enter annual yield to maturity as your answer. b. What is the b..
Vedder, Inc., has 7.2 million shares of common stock outstanding. The current share price is $62.20, and the book value per share is $5.20. Vedder also has two bond issues outstanding. The first bond issue has a face value of $71.2 million, a coupon ..
Vang, Inc., has an average collection period of 19 days. Its average daily investment in receivables is $78,000.What is the receivables turnover? What are annual credit sales?
How can you determine a company’s method of depreciation used when looking at the line item (Fixed assets, net) on the balance sheet? The financial notes do not give much information.
You win a scratch off lottery ticket that promises to pay an initial payment of 1,000 this year and grow at a rate of 5% forever. If the discount rate is 6%, what is the present value of this investment?
Find the PI. Cost of capital is 10.2%. The initial outlay is $256, 900. The following after-tax cash flows:
What is the conclusion? Is there evidence of a mean difference in values of appraisal predicators?
You bought 100 shares of star bucks corp. (sbux) 7 years ago (1aug'95) for $5.90 per share and sold the 100 shares today for $20.31 each. what are your returns? at the same time your sister bought 100 shares of coca- cola (ko). how did your returns c..
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