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A first analysis used straight line depreciation, but if $200,000 was recognized in year 1 as the depreciation expense, what would be the effect on the Operating Cash Flow for Year 1 if the tax rate
Fullerton Wine Company is a retailer which sells vintage wines. The company has established a policy of reordering inventory every 30 days. A recently employed MBA has considered Fullerton's invento
The supplier is now offering a quantity discount of $0.03 per gallon if CCC orders 10,000 gallons at a time. Should CCC take the discount?
Determine the before-tax benefit or loss of accepting the quantity discount. (Assume the carrying cost remains at $0.40 per box whether or not the discount is taken.)
What is the approximate (nominal) rate of interest on the 10.19 percent add-on loan?
Compute the effective cost of not taking the cash discount under the following trade credit terms.
If the required return is 13% and the company just paid a $1.80 dividend, what is the current share price Draw a timeline.
The other costs $320,000, also lasts 5 years, and generates pretax cost savings of $60,000. Both are depreciated straight line. The tax rate is 40%. Neither machine will be used after the 5 years. W
Johnny's Liquor has a debt to equity ratio of 1.0, WACC of 14%, and a pretax cost of debt of 6%. Its tax rate is 40%
Snow Games has 20,000 shares outstanding, a market price of $20 per share, and a cost of equity of 15.00%. It can borrow at a pretax rate of 9.00%, but currently has no debt. It wants to restructure
What would happen to bank profits if interest rates were to fall by 1 percentage point? You should report your answer in terms of the change in profit per $100 in assets.
It also has bond debt with a total book value of $300 million that can be sold for a price of $1,000 for each bond's $1,000 face value. What is the Joe Investigation Service's total market value?
At 100,000 units sold, Operating Cash Flow is $585,000. If Fixed Costs are $100,000.
A four year project costs $1.7 million and has straight-line depreciation. Sales of 190 units per year are projected, with a unit sales price of $18,000. Variable costs per unit are $11,200, and fix
The spectrometer would have no effect on revenues, but it is expected to save the firm $25,000 per year in before-tax operating costs, mainly labor. The firm's marginal federal-plus-state tax rate i
Calculate the IRR, the NPV, and the MIRR for each project, and indicate the correct accept-reject decision for each.
what will be the increase in operating cash flow? What is the new degree of operating leverage?
A new gear assembly project has these estimates: price = $1,900 per unit; variable costs = $240 per unit; fixed costs = $4.8 million; quantity produced = 95,000 units. These estimates, however, are
Variable material costs for a product are $5.43 per unit, and variable labor costs are $3.13 per unit.
The project is estimated to generate $3,552,000 in annual sales, with costs of $1,420,800. The tax rate is 33 percent and the required return on the project is 12 percent.
If the required return is 19 percent, what is the project's equivalent annual cost, or EAC? (Do not round your intermediate calculations.)
Find Cash Flow from Assets in each of the 10 year lives of projects 1 and 2 (remember to include the effect of additions to NWC).
Currently, Langley is paying the supplier the full amount due on day 45 but it is considering taking the discount paying on day 10, and replacing the trade credit with a bank loan that has a 10% ann
HRL has issued 250,000 bonds that are currently selling at a price of $1,091.65 each, and the current price of HRL's common stock is $29.48. Additionally, you will need the information that HRL has
The probability of a recession has increased to 30% and the probability for a normal state of economy is now 40%. The market risk premium has increased by 1% as well. What is the standard deviation