Question1. The Buck Store is considering a project which will need additional inventory of $216,000 and will raise accounts payable by $181,000. Accounts receivable are currently $525,000 and are anticipated to enhance by 9 percent when this project is admitted. What is project's initial cash flow for net working capital?
Question2. Winnebagel Corp. Presently sells 28,200 motor homes per year at $42,300 each, and 11,280 luxury motor coaches per year at the rate of $79,900 each. The company desires to introduce a new portable camper to fill out its product line. It anticipates selling 19,740 of these campers per year at the rate of $11,280 each. An independent consultant has determined that when Winnebagel introduces the new campers, it must amplify the sales of its existing motor homes by 4,700 units per year, and lessen the sales of its motor coaches by 1,222 units per year. What is amount that must be used as the annual sales figure when calculating this project?
Question3. XYZ, Inc. is considering a new five year expansion project which needs an initial fixed asset investment of $2.484 million. The fixed asset will be depreciated straight-line to zero over its 5-year tax life, after which time it will be insignificant. The project is estimated to make $2,208,000 in annual sales, with costs of $883,200. The tax rate is 32 percent and the required return on project is 11 percent. What is net present value for this project?