Diane Has Just Turned

Diane Has Just Turned for US$3 only (Instant Download)

Diane Has Just Turned

Diane has just turned 18 and also completed high school and is wondering about the value of a college education. She is pretty good with numbers, and driven by financial considerations only, so she sits down to calculate whether it is worth the large sum of money. She knows that her first year tuition will be $12,000, due at the beginning of the year (that is, right away). Based on historical trends she estimates that tuition will rise at 6% per year for the 4 years she is in school. She also estimates that her living expense above and beyond tuition will be $8,000 per year (assume this occurs at the end of the year) for the first year and will increase $500 each year thereafter to keep up with inflation. She does not plan to work at all while attending school. Were she to forgo college she would be able to make $25,000 per year out of high school and expects that to grow 3% annually. With the college degree, she estimates that she will earn $45,000/year out of college, again with annual 3% increases in salary. Either way, she plans to work until turning 60 (she begins college right away). The interest/discount rate is 6%. What is the NPV of her college education (rounding to the nearest dollar)? Note: All cash flows except tuition payments occur at the end of the year.

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Mini Case Building the Eurotunnel

Mini Case Building the Eurotunnel for $21 Only Buy Now
Free Sample Answer Given Below.
Chapter 11
Calculate NPV and IRR for mini case ‘Building the Eurotunnel’.

Unit 4 Discussion Board Unit SWOT Analysis and NPV

Unit 4 Discussion Board Unit SWOT Analysis and NPV for $15 OnlySWOT Analysis
Students will be expected to post their first initial discussion board posting by Friday of each week. Discussion posts will be graded and late submissions will be assigned a late penalty in accordance with the late penalty policy found in the syllabus. NOTE: All submission posting times are based on midnight Central Time.
Students are expected to post their responses to peers by Tuesday. NOTE: All submission posting times are based on midnight Central Time.
Primary Task Response: Respond to the following scenario with your thoughts, ideas, and comments. Be substantive and clear, and use research to reinforce your ideas.
Now is the time to make a decision about relocating the manufacturing operation to the United States is fast-approaching. AutoEdge, like most companies, uses a strengths, weaknesses, opportunities, and threat (SWOT) analysis to facilitate its decision making.
You have just completed your first monthly activity report for the board when Lester calls.
“Hi,” you say. “I just finished my monthly report for the board. I’ll e-mail it to you when we get done talking.”
“Sounds good,” he says. “I’m calling because we need your expertise again for another facet of our investigation into the manufacturing operation. This time, I want you to conduct a detailed SWOT analysis for AutoEdge, and provide a brief summary of your analysis.”
“I was expecting this,” you say. “Some of the research I’ve done over the past 4 weeks will be useful as I put this analysis together for you.”
“Yes, I thought you were in a good position to do this work,” he says. “Your analysis may be different from other people who have been at the company longer, but your fresh perspective on the components will be helpful in moving the debate forward.”
“That’s a good point,” you say. “I’ll keep that in mind as I go through the information.”
The materials found in the M.U.S.E. may help you with this assignment. Additional information is also provided in the Lessons from Experience series found at the following link:
Forecasting With Numbers.
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Fundamentals of Capital Budgeting: Billingham Packaging Production Capacity

Fundamentals of Capital Budgeting: Billingham Packaging Production Capacity

Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $2.75 million. Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a $50,000 feasibility study to analyze the decision to buy the XC-750, resulting in the following estimates:

Marketing: Once the XC-750 is operating next year, the extra capacity is expected to

generate $10 million per year in additional sales, which will continue for the 10-year life of the machine.

Operations: The disruption caused by the installation will decrease sales by $5 million this year. Once the machine is operating next year, the cost of goods for the products produced by the XC-750 is expected to be 70% of their sale price. The increased production will require additional inventory on hand of $1 million to be added in year 0 and depleted in year 10.

Human Resources: The expansion will require additional sales and administrative personnel at a cost of $2 million per year.

Accounting: The XC-750 will be depreciated via the straight-line method over the 10-year life of the machine. The firm expects receivables from the new sales to be 15% of revenues and payables to be 10% of the cost of goods sold. Billingham’s marginal corporate tax rate is 35%.

a. Determine the incremental earnings from the purchase of the XC-750.

b. Determine the free cash flow from the purchase of the XC-750.

c. If the appropriate cost of capital for the expansion is 10%, compute the NPV of the

purchase.

d. While the expected new sales will be $10 million per year from the expansion, estimates range from $8 million to $12 million. What is the NPV in the worst case? In the best case?

e. What is the break-even level of new sales from the expansion? What is the break-even level for the cost of goods sold?

f. Billingham could instead purchase the XC-900, which offers even greater capacity. The cost of the XC-900 is $4 million. The extra capacity would not be useful in the first two years of operation, but would allow for additional sales in years 3–10. What level of additional sales (above the $10 million expected for the XC-750) per year in those years would justify purchasing the larger machine?

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Bauer Industries Free Cashflow Projections

NPV vs discount rate comparison for two mutual...

Bauer Industries is an automobile manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks. Bauer plans to use a cost of capital of 12 to evaluate this project. Based on extensive research, it has prepared the following incremental free cash flow projections (in millions of dollars):

a. For this base-case scenario, what is the NPV of the plant to manufacture lightweight trucks?

Mini Case: The Power to Cool Off in Florida (Indiantown Cogeneration Project)

Tabebuia caraiba. Jensen Beach, Martin County,...

CFM3 Ch 10 Minicase The Power to Cool Off in Florida             in $19 only

Objective:
This case demonstrates the use of NPV, IRR, and financial ratios for evaluating a capital budgeting project.
Case Discussion:
The Indiantown Cogeneration Project involved the construction and operation of a coal-fired plant in Martin County, Florida, that produces electricity and steam. The capital cost (including interest during construction) was approximately $770 million. Since completion, it has an electric generating capacity of 330 megawatts (net) and a steam capacity of 175,000 pounds per hour. The project sells the electric power to Florida Power & Light Company (FPL) under a 30-year contract and the steam to Caulkins Indiantown Citrus Company under a 15-year contract.

FPL’s electricity payments have two parts: one for electric capacity and the other for the electric energy that it receives.

The project’s financing consisted of $630 million of 30-year 9% APR interest rate debt and $140 million of equity. The debt requires equal annual sinking fund payments of $31.5 million beginning in year 11. Depreciation is straight line to zero over 20 years. The tax rate is 40%. Other information about the project includes:

Mini Case: Getting Off the Ground at Boeing

CFM3 Ch 09 Mini Case:  Getting Off the Ground at Boeing in $9 only

Objective:

This case asks the student to calculate the incremental cash flows and use the NPV and IRR methods to evaluate Boeing’s investment project to build a new plane. This project, because of its size and importance to Boeing, was potentially a “make-or-break” investment for the firm. It was therefore critical to Boeing to “get it right” when it performed the capital budgeting analysis.

Case Discussion:
By the time Boeing announced the newest addition to its fleet, much of the preliminary work was already computed. The new plane was an enormous undertaking. Research and development, begun two and a half years earlier, would cost between $4 billion and $5 billion. Production facilities and personnel training would require an additional investment of $2.0 billion, and $1.7 billion in working capital would be required. The exhibit included in the case furnishes profit, depreciation, and capital expenditure projections for the project.

Finance Question: NPV and CAPM Related

Finance Question: NPV and CAPM Related

Finance Question: NPV and CAPM Related

Suppose that a project is to last 10 years, has an initial investment of $20,000, and cash flows of $2,000 per year and a terminal cash flow of $9,000.

Further, suppose that the project has a beta of 1.2, the risk free rate is 5.5%, and the market premium is 7.0%.  Calculate the NPV of this project and identify the decisions rule.

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Bucholz Brands Net Present Value (NPV) Estimation

Bucholz Brands Net Present Value (NPV) Estimation
Bucholz Brands is considering the development of a new ketchup product. The ketchup will be sold in a variety of different colors and will be marketed to young children. In evaluating the proposed project, the company has collected the following information:
  • The company estimates that the project will last for four years.
  • The company will need to purchase new machinery that has an up-front cost of $300 million (incurred at t = 0). At t = 4, the machinery has an estimated salvage value of $50 million.
  • The machinery will be depreciated on a 4-year straight-line basis.
  • Production on the new ketchup product will take place in a recently vacated facility that the company owns. The facility is empty and Bucholz does not intend to lease the facility.
  • •The project will require a $60 million increase in inventory at t = 0. The company expects that itsaccounts payable will rise by $10 million at t = 0. After t = 0, there will be no changes in net operating working capital, until t = 4 when the project iscompleted, and the net operating working capital is completely recovered.
  • The company estimates that sales of the new ketchup will be $200 million each of the next four years.
  • The operating costs, excluding depreciation, are expected to be $100 million each year.
  • The company’s tax rate is 40 percent.
  • The project’s WACC is 10 percent.
What is the project’s estimated net present value (NPV)?  Need all the procedure with the answer

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Finance Questions Related to PV, FV, FVOA & NPV

Finance Questions Related to PV, FV, FVOA & NPV in $2.50 only

1. Calculate the future value of 1,535 invested today for 8 years at 6 percent.

2. What is the total present value of the following cash stream, discounted at 8 percent?

Year    1       2      3      4       5

Amt   400   750  945  145   78

3. If you invested $2,000 per year into an IRA for 30 years and received 6 percent return each year, what would the account balance be in 30 years?

4. A friend gives you a proposition. If you give him 1,500 dollars today, he will guarantee your receive 12 percent a year for the next 5 years. How much money will you receive from him at the end of 5 years?

5. You want to buy a new Computer Aided Design (CAD) system for your business. The cost of the system is $150,000 and you expect to save over $40,000 per year in reduced labor costs. Please calculate the net present value of the CAD if your required return is 10 percent and the life of the system is expected to be 5 years.

6. Your company is considering converting its heating system in the main office from coal to heating oil. The initial cost of removing the coal fired furnace and installing an new oil fired unit is $60,000. The life of the analysis is 7 years. In the past you spent $25,000 per year on coal. The new company says you will spend no more than $15,000 per year on heating oil. If your required return is 12 percent, should you make this investment? Please calculate the net present value of this project.

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How to Calculate Net Present Value

How to Calculate Net Present Value in $5 OnlyHow to Calculate Net Present Value

How do i calculate net present value?

Please let me know how to calculate NPV with out calculator, with calculator and with the use of MS Excel.

Provide MS-Word as well as MS-Excel sheet with example.

Please provide some external link also.

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Teaching Net Present Value and Future Value

Teaching Net Present Value (NPV) & Future Value (FV) for $11 OnlyTeaching Net Present Value and Future Value
You have been asked by a manager in your organization to put together a training program explaining Net Present Value (NPV) and Future Value (FV) and how they are used to evaluate the price of stock. You have been given the following objectives:

Upon completing your Net Present Value (NPV) and Future Value (FV) Training Program, employees should be able to do the following:

BUSINESS BA327 Mills Mining

BUSINESS BA327 Mills Mining for $3.75 Only (Instant Download)BUSINESS BA327 Mills Mining

Mills Mining is considering an expansion project. To date they have spent $75,000 investigating the viability of the project and have decided to proceed. The proposed project will cost $500,000 in addition to the $75,000 that was spent on the feasibility study. The project will be depreciated over a 3 year MACRS class life.

MACRS

Depreciation

Year Rates

1 0.33

2 0.45

3 0.15

4 0.07

If the project is undertaken the company will need to increase its inventories by $50,000, and its accounts payable will rise by $10,000. The company will realize an additional $600,000 in sales over each of the next three years. The company’s operating costs (not including depreciation) will increase by $400,000 a year. The company’s tax rate is 40%. At t = 3, the project’s economic life is complete, but it will have a salvage value (before-tax) of $50,000 after three years. The project’s WACC is 10%.

a) What is the project’s net present value (NPV)? What is the IRR?

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Objective Types Questions

Objective Types Questions in $7 only

1. Which statement is CORRECT?

a) The IRR method assumes that Cash flows are reinvested at the firm’s WACC

b) The use of Accelerated Depreciation methods (instead of Straight-Line) results in higher operating cash flows in a projects early years.

c) For independent projects with normal cash flows, the NPV, Payback and IRR methods will always lead to the same decision.

d) For normal projects, lower costs of capital lead to lower NPVs.

2. Which of the following is true for normal projects if the cost of capital is positive?

a) If a project’s IRR is positive, then its NPV will always be positive

b) If a project’s NPV is negative, then its Modified IRR will be negative

c) If a project’s NPV is positive, then its Profitability Index will always be positive

d) If a project’s IRR is positive, then its Discounted Payback Period will exist

Clark Paints: Calculate Annual cash flows, Payback Period NPV & IRR

Clark Paints: Calculate Annual cash flows, Payback Period NPV & IRR

Clark Paints: The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchasing them. The equipment needed would cost $200,000, with a disposal value of $40,000, and it would be able to produce 5,500,000 cans over the life of the machinery. The production department estimates that approximately 1,100,000 cans would be needed for each of the next five years.

The company would hire three new employees. These three individuals would be full-time employees working 2,000 hours per year and earning $12.00 per hour. They would also receive the same benefits as other production employees, 18% of wages, in addition to $2,500 of health benefits.

It is estimated that the raw materials will cost 25¢ per can and that other variable costs would be 5¢ per can. Since there is currently unused space in the factory, no additional fixed costs would be incurred if this proposal is accepted.