What are the reasons for increasing the future cash inflow?
What are the reasons for increasing the future cash inflow?
Homework Answers
Increasing the future cash inflows, has a positive effect on the cash position of the business. This increases its liquidity and enables it to meet its debts and more effectively. There are lesser chances of default on current liabilities since higher cash implies greater current assets and hence greater liquidity. The business is better equipped to pay for its expenses with greater cash inflow. The working capital of the business increases which is an important source of financing for short-term purposes. This reduces the cost of finance due to which the business becomes more profitable.
Given the following cash inflow at the end of each year, what is the future value...
Given the following cash inflow at the end of each year, what is the future value of this cash flow at 3 %, 8 %, and 16% interest rates at the end of year 7? Year 1: $13 comma 000 Year 2: $22 comma 000 Year 3: $32 comma 000 Years 4 through 6: $0 Year 7: $140 comma 000 What is the future value of this cash flow at 3% interest rate at the end of year 7?
Different Cash Flow. Give the following cash inflow at the end of each year, what is...
Different Cash Flow. Give the following cash inflow at the end of
each year, what is the future value of this cash flow at %7, %12,
%16 , interest rates at the end of the year 7 ?
Homework: Chapter 4 Homewo rk Score: 0 of 1 pt 1 of 16 (13 complete) P4-1 (similar to) Different cash flow. Given the following cash inflow at the end of each year, what is the future value of this cash flow at...
Payback Period: Initial Investment Year 1 Cash Inflow Year 2 Cash Inflow Year 3 Cash Inflow...
Payback Period: Initial Investment Year 1 Cash Inflow Year 2 Cash Inflow Year 3 Cash Inflow Year 4 Cash Inflow Year 5 Cash Inflow Project A 100,000 10,000 10,000 20,000 30,000 30,000 Project B 200,000 50,000 60,000 90,000 60,000 60,000 In years, what is the payback period for Project A? In years, what is the payback period for Project B? Based on payback period, which project would you recommend for your company to pursue? Initial Investment 1st Year Cash Inflow...
Given the following cash inflow, what is the present value of this cash flow at 6%,...
Given the following cash inflow, what is the present value of this cash flow at 6%, 11%, 23% discount rates? Year Cash Inflow 1 $3,500 2 $8,000 3 $0 4 $0 5 $0 6 $0 7 $0 8 $20,000 What is the present value of this cash flow at 6%, 11% and 23% discount rate? round to the nearest cent
t the end of year 7? Different cash flow. Given the following cash inflow at the...
t the end of year 7? Different cash flow. Given the following cash inflow at the end of each year, what is the future value of this cash flow at 3%, 10% , and 14% interest rates Year 1 $12,000 Year 2: Year 3 Years 4 through 6 Year 7 $19.000 $28,000 $0 $140,000
Different cash flow. Given the following cash inflow, what is the present value of this cash...
Different cash flow. Given the following cash inflow, what is the present value of this cash flow at 3%, 13%, and 24% discount rates? Year 1 Year 2: Years 3 through 7: Year 8: $1,000 $6,000 SO $26,000 What is the present value of this cash flow at 3% discount rate? SL (Round to the nearest cent.) What is the present value of this cash flow at 13% discount rate? SL (Round to the nearest cent.) What is the present...
Consider an investment that costs $420,000 and has a cash inflow of $130,000 every year for 5 years. The required r...
Consider an investment that costs $420,000 and has a cash inflow of $130,000 every year for 5 years. The required return is 8.5% and required payback is 4 years. What is the payback period? What is the NPV? What is the IRR (Note: Please complete this homework assignment on Excel and hand in the spreadsheet with your answers. Should we accept the project? Explain your reasons.
Suppose an enterprise received a cash inflow for the sale of a machine. The enterprise intends...
Suppose an enterprise received a cash inflow for the sale of a machine. The enterprise intends to purchase a newer model in the near future. How would you classify this transaction based upon the accruals classification? A) working capital accruals B) non-current operating accruals C) financing accruals
What are some reasons for increasing overall levels of corporate debt in recent years? What level...
What are some reasons for increasing overall levels of corporate debt in recent years? What level of risk could happen for another recession as a result? In terms of financial statements, what effects can debt have on the overall health of a company, positive or negative?
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $27,500 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 10%. Ignore inflation. a. Calculate project NPV for each company. (Do not...
Different Cash Flow. Give the following cash inflow at the end of
each year, what is the future value of this cash flow at %7, %12,
%16 , interest rates at the end of the year 7 ?
Homework: Chapter 4 Homewo rk Score: 0 of 1 pt 1 of 16 (13 complete) P4-1 (similar to) Different cash flow. Given the following cash inflow at the end of each year, what is the future value of this cash flow at...
t the end of year 7? Different cash flow. Given the following cash inflow at the end of each year, what is the future value of this cash flow at 3%, 10% , and 14% interest rates Year 1 $12,000 Year 2: Year 3 Years 4 through 6 Year 7 $19.000 $28,000 $0 $140,000
Different cash flow. Given the following cash inflow, what is the present value of this cash flow at 3%, 13%, and 24% discount rates? Year 1 Year 2: Years 3 through 7: Year 8: $1,000 $6,000 SO $26,000 What is the present value of this cash flow at 3% discount rate? SL (Round to the nearest cent.) What is the present value of this cash flow at 13% discount rate? SL (Round to the nearest cent.) What is the present...
Consider an investment that costs $420,000 and has a cash inflow of $130,000 every year for 5 years. The required return is 8.5% and required payback is 4 years. What is the payback period? What is the NPV? What is the IRR (Note: Please complete this homework assignment on Excel and hand in the spreadsheet with your answers. Should we accept the project? Explain your reasons.
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $27,500 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 10%. Ignore inflation. a. Calculate project NPV for each company. (Do not...
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