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Your company is thinking about acquiring another corporation. You have two choices—the cost of each choice is $250,000. You cannot spend more than that, so acquiring both corporations is not an option. The following are your critical data:Corporation ARevenues = $100,000 in year one, increasing by 10% each yearExpenses = $20,000 in year one, increasing by 15% each yearDepreciation expense = $5,000 each yearTax rate = 25%Discount rate = 10%Corporation BRevenues = $150,000 in year one, increasing by 8% each yearExpenses = $60,000 in year one, increasing by 10% each yearDepreciation expense = $10,000 each yearTax rate = 25%Discount rate = 11%Compute and analyze items (a) through (d) using a Microsoft® Excel® spreadsheet. Make sure all calculations can be seen in the background of the applicable spreadsheet cells. In other words, leave an audit trail so others can see how you arrived at your calculations and analysis. Items (a) through (d) should be submitted in Microsoft® Excel®; indicate your recommendation (e) in the Microsoft® Excel® spreadsheet; the paper stated in item (f) should be submitted consistent with APA guidelines.a. A 5-year projected income statementb. A 5-year projected cash flowc. Net present value (NPV)d. Internal rate of return (IRR)e. Based on items (a) through (d), which company would you recommend acquiring?f. Write a paper of no more 1,050 words that defines, analyzes, and interprets the answers to items (c) and (d). Present the rationale behind each item and why it supports your decision stated in item (e). Also, attempt to describe the relationship between NPV and IRR. (Hint. The key factor is the discount rate used.) In addition to the paper, a Micosoft® Excel® spreadsheet showing your projections and calculations must be shown and attached.
Determine the net present value of the investment if the required rate of return is 14 percent. Should the investment be undertaken?
Given emerging information technology, there's controversy regarding the continuing viability of this marketing concept. One view of how the concept might continue to evolve is from renowned futurist, Thomas Frey. Using the following websites:
What is the undiscounted cash flow in the final year of an investment, assuming $10,000 after-tax cash flows from operations, $1,000 from the sale of a fully depreciated machine, $2,000 required in additional working capital, and a 35% tax rate? P..
At one time many customers turned to Sears for home improvement projects. As the economy boomed many warehouse stores began to open their doors.
Diamond Eyes, Inc., has sales of $14 million, total assets of $12 million, and total debt of $6.7 million. Assume the profit margin is 7 percent.
Explain why the present value of a cash flow stream, and the asset associated therewith; fluctuate in value with the level of interest rates in the capital markets.
The money has not been touched since a deposit was made exactly five years ago. If the most recent deposit was made today, how much money is currently in the account?
What is an internal process to design jobs that properly describe the duties and responsabilities of the position and comply with the american disabilities act.
in your own words explain capital budgeting. why is it important to a companyrsquos long-term success? provide an
Assume a U.S. dollar is worth 10.38 Mexican pesos and .64 euro's. Calculate the implied value of a Mexican Peso in terms of a euro.
A client invested $20,000 in an interest bearing promissory note earning 9% anual rate of interest compounded monthly. How much will the note be worth at the end of 8 years assuming all interest is reinvested at the 9% rate?
Mini Case Yanzhou (china) Bids for Felix Resources (Australia) 1 When should stockholders doubt their own company's support of a friendly acquisition?
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