Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Perky Food Corporation produces and sells coffee jelly. Perky currently produces the jelly using a manual operation but is considering the purchase of machinery to automate its operations. Information related to the two operations is as follows:
Manual
Automated
Operation
Cost of machinery
-
$420,000
Useful life of machinery
12 years
Expected salvage value in 12 years
$0
Expected annual revenue (50,000 jars)
$210,000
Expected annual variable costs
$135,000
$42,000
Expected annual fixed costs
$30,000
$72,000
Perky"s discount rate is 12%. Perky uses the straight-line method of depreciation.
1. What is the net present value of automating operations using the incremental cost approach?
A) $11,940
B) $56,940
C) $(104,106)
D) $112,684
2. Within what range does the internal rate of return fall?
A) 6% to 8%
B) 10% to 12%
C) 12% to 14%
D) 18% to 20%
3. What is the simple rate of return for automating operations?
A) 3.8%
B) 12.1%
C) 14.5%
D) 22.9%
4. What will be the effect on the net present value of the decision to automate operations if 60,000 jars instead of 50,000 jars are expected to be sold each year? (Assume no change in cost structure or selling price.)
A) no effect
B) $52,030 decrease
C) $63,179 increase
D) $115,208 increase
A stock has a beta of 1.55, the expected return on the market is 12 percent, and the risk-free rate is 4.8 percent. What must the expected return on this stock be?
Discuss the importance of implementation and monitoring in problem solving.
you are the financial manager of a company of your choice. you have been asked to share with a group of college interns
q. 1. assume that you are the nursing administrator for a medical group that expects a severe outbreak of flu this
experts are starting to rethink how much stock people should hold in retirement.in general the new thinking goes people
To support your growth, you need to purchase some long-term fixed assets. You are considering whether to buy or lease. Why might a financial lease be especially attractive for your situation?
what factors must a financial manager consider when making decisions about accounts
consider a bond selling for 98 per 100 face value. a call option selling for 8 has an exercise price of 105. answer
Zelnor, Inc., is an all-equity firm with 100 million shares outstanding currently trading for $8.50 per share. Suppose Zelnor decides to grant a total of 10 million new shares to employees as part of a new compensation plan.
Applying the values of St, K, rf , and T specified, use your spreadsheet and trial and error to determine the implied volatility of a call with a price of $7.2568.
investors can sue the firm if preferred dividend payments are not paid much like bondholders can sue for non-payments of interest.
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd