What is projects initial cash flow for net working capital

Assignment Help Financial Management
Reference no: EM13877983

Hunter’s Hut is considering a project that will require additional inventory of $176,000 and will increase accounts payable by $148,000. Accounts receivable is currently $305,000 and is expected to increase by 11 percent if this project is accepted. What is the project's initial cash flow for net working capital?

Reference no: EM13877983

Questions Cloud

When underwriters issue securities on a best efforts basis : When underwriters issue securities on a best efforts basis, they:
Components of traditional balance sheet : The following items are components of a traditional balance sheet. How much is the total assets of the firm?
What is the capital allocation problem : What is the capital allocation problem? According to the efficient diversification, what should be the optimal solution to the capital allocation problem?
A project will produce an operating cash flow : A project will produce an operating cash flow of $31,200 a year for 7 years. The initial fixed asset investment in the project will be $204,900. The net after tax salvage value is estimated at $62,000 and will be received during the last year of the ..
What is projects initial cash flow for net working capital : Hunter’s Hut is considering a project that will require additional inventory of $176,000 and will increase accounts payable by $148,000. Accounts receivable is currently $305,000 and is expected to increase by 11 percent if this project is accepted. ..
Issue of preferred stock : E-Eyes.com has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. If you require a return of 9.25 percent on this stock, how much sho..
Pay dividend-what is the current stock price : Krispy Kreme is expected to pay a dividend of $2 next period and the dividends are expected to grow at a 4% per year. The required return is 14%. What is the current stock price?
What is the cash flow in year two of the project : A potential project requires the purchase of $612,000 of equipment. The equipment will be depreciated straight-line to a zero book value over the three-year life of the project. Net working capital equal to 25 percent of sales will be required to sup..
Decide between two different conveyor belt systems : Eads Industrial Systems Company (EISC) is trying to decide between two different conveyor belt systems. System A costs $538,000, has a 4-year life, and requires $133,000 in pretax annual operating costs. System B costs $630,000, has a five-year life,..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the present value of the futures contract in dollar

Treasury bond futures contract settles at 105'8. What is the present value of the futures contract in dollars? Calculate the implied annual interest rate on the futures contract? Calculate the new value of the futures contract if interest rates incre..

  A treasury bond futures contract settled

A Treasury bond futures contract settled at 97'16. Calculate the present value of one futures contract? Are current market interest rates higher or lower than the standardized rate on a futures contract? Explain. Calculate the implied annual interest..

  Common stock and bonds

ABC Enterprise is considering the purchase of a new assembly line, costing $300,000. The new assembly line has a 5-year tax life and will be depreciated under straight-line. The firm estimates that in 4 years the assembly line can be salvaged for $40..

  Expense ratio-dividend ratio-combined ratio-operating ratio

National Property Casualty has $9,500,000 in premiums on its auto insurance line. The line’s losses amount to $6,245,900, expenses are $2,906,430, and dividends are $189,650. The insurer earns $397,110 in the investment of its premiums. Calculate the..

  Many states prohibited bank branching

Many states prohibited bank branching because of all of the following except:

  Managers want to estimate common stock value

Berth Cargo Corporation is considering going public. Managers want to estimate common stock value. The firm’s weighted average cost of capital is 11%, and it has $1.5 million of debt at market value, and $400,000 of preferred stock also at market val..

  Down payment-bonuses and discount rate

You will receive 2,500 in bonuses each year for the next three years (at the end of each year). You are hoping to use these bonuses for a car down payment in about ten years. At a 7.79% discount rate, how much will you have saved? (Round to two decim..

  Purchase bonds for this absolute matching strategy

A company must make yearly payments starting at $100,000 and increasing by 6% every year for 10 years. Payments are due at the end of each year. They can invest in a portfolio of coupon-paying bonds that vary in term from 1 to 10 years (a total of 10..

  What is external rate of return

A proprietor is considering a new investment of $1,000, with expected returns of 150 per year for 1st 3 yr, 1150 in 4th, MARR = 8%, What is external rate of return?

  Investment proposal-weighted average cost of capital

Your firm is considering a new investment proposal and would like to calculate the weighted average cost of capital. If the firm's bonds are not frequently traded, how would you go about determining a cost of debt for this company? A preferred stock ..

  Consider in determining target debt to equity ratio

What three factors are important to consider in determining a target debt to equity ratio?

  The cost of the low-emission equipment

The cost of the low-emission (replacement) equipment is $50,000 for each of the company’s two existing production lines, totaling $100,000 if the company installed the equipment in both production lines. There do not appear to be additional revenue o..

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