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![Initial cash flow=-$ 638,000 -543000-218000-42000+165000]](http://img.homeworklib.com/questions/9dce2f60-7173-11ea-9678-2d6a97884832.png?x-oss-process=image/resize,w_560)
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17. Hollister & Hollister is considering a new project. The project will require $543,000 for new...
A project will require $543,000 for fixed assets, $118,000 for inventory, and $142,000 for accounts receivable....
A project will require $543,000 for fixed assets, $118,000 for inventory, and $142,000 for accounts receivable. Short - term debt is expected to increase by $65,000. The project has a six-year life. The fixed assets will be depreciated straight - line to a zero book value over the life of the project. No bonus depreciation will be taken. The project is expected to generate annual sales of $905,000 with costs of $730,000. What is the project's cash flow at Time...
3: Margarite's Enterprises is considering a new project. The project will require $325,000 for new fixed...
3: Margarite's Enterprises is considering a new project. The project will require $325,000 for new fixed assets, $160,000 for additional inventory and $35,000 for additional accounts receivable. Short-term debt is expected to increase by $100,000 and long-term debt is expected to increase by $300,000. The project has a 5-year life. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. At the end of the project, the fixed assets can be sold...
Question 1 Azalea Berhad is considering a new project. The project will require RM400,000 for new...
Question 1 Azalea Berhad is considering a new project. The project will require RM400,000 for new fixed assets, RM150,000 for additional inventory and RM35,000 for additional accounts receivable. Short term debt is expected to increase by RM100,000. The project has a five-year life. The fixed assets will be depreciated straight-line to a zero-book value over the life of the project. At the end of the project, fixed assets can be sold for 25% of their original cost. The net working...
Judson Industries is considering a new project. The project will initially require $749,000 for n...
Judson Industries is considering a new project. The project will initially require $749,000 for new fixed assets, $238,000 for additional inventory, and $25,000 for additional accounts receivable. Accounts payable is expected to increase by $70,001. The fixed assets will belong in a 30% CCA class. At the end of the project, in four years' time, the fixed assets can be sold for 40% of their original cost. The net working capital will return to its original level at the end...
Judson Industries is considering a new project. The project will initially require $749,000 for new fixed...
Judson Industries is considering a new project. The project will initially require $749,000 for new fixed assets, $238,000 for additional inventory, and $25,000 for additional accounts receivable. Accounts payable is expected to increase by $70,001. The fixed assets will belong in a 30% CCA class. At the end of the project, in four years' time, the fixed assets can be sold for 40% of their original cost. The net working capital will return to its original level at the end...
Question 17 10 pts Western Tech is considering a new project that will require $118,000 of...
Question 17 10 pts Western Tech is considering a new project that will require $118,000 of fixed assets and networking capital of $16,000. The fixed assets will be depreciated on a straight-line basis to a zero salvage value over three years. This project is expected to produce an operating cash flow of $45,000 the first year with that amount decreasing by 5 percent annually for two years before the project is shut down. The fixed assets can be sold for...
Newtown Propane is a small company and is considering a project that will require $700,000 in...
Newtown Propane is a small company and is considering a project that will require $700,000 in assets. The project will be financed with 100% equity. The company faces a tax rate of 25%. What will be the ROE (return on equity) for this project if it produces an EBIT (earnings before interest and taxes) of $145,000? 15.54% 10.10% 10.8896 12.43% Determine what the project's ROE will be if its EBIT is - $60,000. When calculating the tax effects, assume that...
(Calculating free cash flows) Vandelay Industries is considering a new project with a 4-year life with...
(Calculating free cash flows) Vandelay Industries is considering a new project with a 4-year life with the following cost and revenue data. This project will require an investment of $120,000 in new equipment. This new equipment will be depreciated down to zero over 4 years using the simplified straight-line method and has no salvage value. This new project will generate additional sales revenue of $112,000 while additional operating costs, excluding depreciation will be 562,000. Vandelay's marginal tax rate is 31...
Montclair Company is considering a project that will require a $500,000 loan. It presently has total...
Montclair Company is considering a project that will require a $500,000 loan. It presently has total liabilities of $220,000, and total assets of $620,000. 1. Compute Montclair’s (a) present debt-to-equity ratio and (b) the debt-to-equity ratio assuming it borrows $500,000 to fund the project. Choose Numerator: / Choose Denominator: Total liabilities / Total equity Debt-to-Equity Ratio (a) $220,000 / $400,000 0.55 (b) $720,000 / 0
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.43 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value (salvage value) of $189,000. The project requires an initial investment in networking capital of $270,000. The project is estimated to generate $2,160,000 in annual sales, with costs of $864,000. The tax rate is 34 percent and the...
3: Margarite's Enterprises is considering a new project. The project will require $325,000 for new fixed assets, $160,000 for additional inventory and $35,000 for additional accounts receivable. Short-term debt is expected to increase by $100,000 and long-term debt is expected to increase by $300,000. The project has a 5-year life. The fixed assets will be depreciated straight-line to a zero book value over the life of the project. At the end of the project, the fixed assets can be sold...
Judson Industries is considering a new project. The project will initially require $749,000 for new fixed assets, $238,000 for additional inventory, and $25,000 for additional accounts receivable. Accounts payable is expected to increase by $70,001. The fixed assets will belong in a 30% CCA class. At the end of the project, in four years' time, the fixed assets can be sold for 40% of their original cost. The net working capital will return to its original level at the end...
Question 17 10 pts Western Tech is considering a new project that will require $118,000 of fixed assets and networking capital of $16,000. The fixed assets will be depreciated on a straight-line basis to a zero salvage value over three years. This project is expected to produce an operating cash flow of $45,000 the first year with that amount decreasing by 5 percent annually for two years before the project is shut down. The fixed assets can be sold for...
Newtown Propane is a small company and is considering a project that will require $700,000 in assets. The project will be financed with 100% equity. The company faces a tax rate of 25%. What will be the ROE (return on equity) for this project if it produces an EBIT (earnings before interest and taxes) of $145,000? 15.54% 10.10% 10.8896 12.43% Determine what the project's ROE will be if its EBIT is - $60,000. When calculating the tax effects, assume that...
(Calculating free cash flows) Vandelay Industries is considering a new project with a 4-year life with the following cost and revenue data. This project will require an investment of $120,000 in new equipment. This new equipment will be depreciated down to zero over 4 years using the simplified straight-line method and has no salvage value. This new project will generate additional sales revenue of $112,000 while additional operating costs, excluding depreciation will be 562,000. Vandelay's marginal tax rate is 31...
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.43 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value (salvage value) of $189,000. The project requires an initial investment in networking capital of $270,000. The project is estimated to generate $2,160,000 in annual sales, with costs of $864,000. The tax rate is 34 percent and the...
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