• Q : Calculate the payback period....
    Finance Basics :

    Calculate the payback period for a $20,000 project expected to return $6,000 for the 1st two years and $3,000 for Years 3 through 5?

  • Q : Calculate the incremental net income of the investment....
    Finance Basics :

    The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. Calculate the incremental net income of the investment for each year.

  • Q : Calculation of net operating income....
    Finance Basics :

    The A. J. Croft Company has identified 2 methods for producing playing cards. One method involves using a machine having a fixed cost of dollar 10,000 and variable costs of dollar 1.00 per deck o

  • Q : Determine the firm''s break even point in sales....
    Finance Basics :

    Camping USA Inc. has only been operating for two years in the outskirts of Albuquerque, New Mexico, and is a new manufacturer of a top-of-line camping tent. Determine the firm's break-even point

  • Q : Computing the npv, payback period and irr....
    Finance Basics :

    Projects A and B, of equal risk, are alternatives for expanding Rosa Company's capacity. Compute the net present value, payback period, and internal rate of return.

  • Q : Bid price....
    Finance Basics :

    Your firm is thinking about making a bid to sell 185,000 cartons of machine screws per year over the next five years to a manufacturer that uses the screws in its production process.

  • Q : Compute operating cash flow....
    Finance Basics :

    Compute operating cash flow using the four different approaches explained in the module & verify that the answer is the same in each case.

  • Q : Determine the initial investment....
    Finance Basics :

    A firm is considering the buy of a new equipment to replace the one that is currently in use. It has gathered the following data on each of these equipments. Determine the initial investment asso

  • Q : How does depreciation affect free cash flows....
    Finance Basics :

    We are considering the introduction of a new product. Currently we are in the 34% marginal tax bracket with a 15% required rate of return or cost of capital.

  • Q : Public activity-financial return....
    Finance Basics :

    To a big extent, transportation project planning is explained as a public activity where purely financial return is not the overriding benefit to be attained.

  • Q : Determine the equipments internal rate of return....
    Finance Basics :

    Allen Company's required rate of return is 12 percent. The company is considering the buy of three equipments as indicated below. Consider every equipment independently.

  • Q : Rank the proposals using the project profitability index....
    Finance Basics :

    Rank the proposals in terms of preference using the project profitability index:

  • Q : Determine the incremental free cash flow....
    Finance Basics :

    You are analyzing the buy of new equipment. Since you are not an expert on this type of equipment, you hire a consulting firm to make recommendations. Determine the incremental free cash flow for

  • Q : Calculate the irr, ntv and payback period....
    Finance Basics :

    Wang requires a 14% rate of return on projects of this nature. Calculate the NTV, internal rate of return, profitability index and payback period on both projects.

  • Q : Adoption of project based on npv....
    Finance Basics :

    A junior executive is fed up with his boss's operating policies. Before leaving the office of his angered superior, the young man advises that a well trained monkey could handle the trivia assigned to

  • Q : Calculation of irr and npv....
    Finance Basics :

    Two mutually exclusive investment projects have the following estimated cash flows, Calculate the internal rate of return and net present value for each project if the firm has a 10% cost of capital.

  • Q : Calculate the projects net present value....
    Finance Basics :

    To secure the contract, the firm must spend 30,000 dollar to retool its plant. This retooling will have no salvage value at the end of the eight years. Comparable investment alternatives are available

  • Q : Compute the npv and profitability index....
    Finance Basics :

    Compute the NPV and profitability index of a project with a net investment of dollar 20,000 and expected net cash flows of dollar 3,000 a year for ten years if the project's required return is 12%.

  • Q : Stores internal rate of return and profitability index....
    Finance Basics :

    XYZ, Inc. is planning to open a new sporting goods store in a suburban mall. XYZ will lease the needed space in the mall. Machine and fixtures for the store will cost 200,000 and be depreciated over a

  • Q : Calculate the internal rate of return and npv....
    Finance Basics :

    Calculate the net present value for each project if the firm has a 10 percent cost of capital. Which project should be adopted? Explain?

  • Q : Compute the net present value and profitability index....
    Finance Basics :

    Compute the net present value and profitability index of a project with a net investment of $20,000 & expected net cash flows of dollar 3,000 a year for ten years if the project's required return

  • Q : Calculate net present value and internal rate of return....
    Finance Basics :

    2 mutually exclusive investment projects have the following forecasted cash flows. Calculate the net present value for each project if the firm has a 10 percent cost of capital

  • Q : Determination of net present value for a project....
    Finance Basics :

    A firm wishes to bid on a contract that is expected to yield the following after tax net cash flows at the end of each year

  • Q : Compute the net present value and profitability index....
    Finance Basics :

    Compute the net present value and profitability index of a project with a net investment of $20,000 and expected net cash flows of 3,000 dollar a year for ten years if the projects required rate of re

  • Q : Calculation of the present value....
    Finance Basics :

    Suppose that Schneider has a 60% probability of receiving the bonuses every year, and that he signed the contract on January 1, 2002. Use the expected value of the bonuses as incremental cash flows.

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