The project would shut down the production for 45 days while the renovations are implemented. The price of polypropylene is GBP675 per ton. The tax rate required for this analysis is 30%. New assets can be depreciated over 15 years on an accelerated basis. Due to the increased production the work-in-process inventory (WIP-inventory) would need to increase by 3.0% of cost of goods.
P0= D1/ Dividend yield= $26.67 P7= P0 *(1+11%)^7= $ 55.36 15. Nachman Industries just paid a dividend of D0 = $1.32. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock’s current market value?
There will be half as many paychecks that have to be prepared per year now. Money is also saved by the interest earned on the yet to be paid out funds and the cutback in bank fees. Also with the change in pay periods, we have totally changed the way the deductions are calculated, resulting in a more precise system as a whole. This project took around a year from start to finish, and it, alone, would be satisfactory to justify increase in my salary on
The real question that needs to be asked is: Which engine is better in the long run and how fast can the engines be put to use? Electric powered vehicles have a lot of promise, such as zero emissions along with plenty to save at the gas stations that people will not have to visit anymore, but at what cost? Building an all new electric vehicle will cost the manufacturer about 20,000 dollars alone. With that price for manufacturers, one can expect the price on the lot would be over 25,000 or more. The Nissan Leaf is expected to price at 30,000 dollars (Winder), which would take years for a consumer to gain money back on it through savings on gasoline.
After the first year’s decrease, there is a 1.5% to 2% increase expected in the iron ore shipments from year 2002 onwards. This implies that the expected cash flows are expected to increase over time 2- Book Value of the ship is $ 39,000,000. Present value of the ship after discounting payments @ 9% is $ 33,738,397 3- Assuming a discount rate of 9% and tax rate of 35%, and the ship is sold for scrap after 15 years for $ 5,000,000, the NPV of
Therefore, CUTCO must consider strategic options that will lead to substantial growth. Limitation of Retail Expansion CUTCO’s current annual revenue is $260 million, which means it needs to generate an additional $740 million in annual revenues to reach its long-term goal. Each store, based on estimates from the pilot stores, is capable of achieving revenues up to $300,000. As CUTCO increases its prices by 5% every two years, its revenue would grow to $380,000. In order for CUTCO to make up the difference of $740 million in missing revenue, it would need to open 2,000 stores in the U.S. With an initial expenditure of $150,000 per store, this venture would cost the company $300 million.
The estimated sales and production of 10,000 pairs of skis as the expected volume, the accounting department has developed the following cost per pair: Direct Labor $35.00 Direct Material $30.00 Total Overhead $15.00 Total Cost $80.00 Under this scenario the company will have no profit, but no loss. In order to continue production during the off season, keeping employees working this scenario of breakeven will provide the company with the ability to continue production. Ski Pro has obtained a purchase price from a subcontractor for the bindings. The accounting department provided a predicted savings of 10% for direct labor and variable overhead cost with a 20% savings on the direct material cost. Under this scenario, as you seen on the spreadsheet provided, the company will make a profit of $.50 per ski.
The firm is currently having problems cost effectively meeting run length requirements as well as meeting quality standards. The general manager has proposed the purchase of one of two large six-color presses designed for long, high-quality runs. The purchase of a new press would enable LI to reduce its cost of labor and therefore the price to the client, putting the firm in a more competitive position. The key financial characteristics of the old press and the two new presses are summarized in what follows. Old press – Originally purchased 3 years ago at an installed cost of $400,000, it is being depreciated under MACRS using a 5-year recovery period.
Additionally, IRR and the payback period were also considered. Although the company would not be able to adhere to company policy in paying back the investment within five years, a calculated IRR of 13%, which exceeds the WACC by 3.1%, and the project’s NPV of $97,987 both imply that acquiring the Vulcan Mold-Maker will add value to the firm. Uncertainties associated with acquiring the new project were also taken into consideration by conducting a sensitivity analysis and accounting for an annual inflation rate of 3%. In the event that negotiations with labor unions fail, the net present value of the project would diminish to -$411,073 negating the project’s value creation potential. A 3% nominal annual inflation rate almost doubles the NPV and increases the IRR, however, the project would be as equally as attractive as it was before inflation since both costs and benefits increase by the inflation rate of 3%.
PMT = (.1085/2)*1000=54.25 N = 60 R = 0.09/2=0.045 (or 4.5 for calculator purposes) FV = 1000 PV =? Answer: 1,190.90 b.What is the value of this bond 10 years after it was issued? PMT = (.1085/2)*1000=54.25 N = 40 R = 0.09/2=0.045 (or 4.5 for calculator purposes) FV = 1000 PV =? Answer: 1170.20 The price will decrease as approaching maturity since at maturity (just before expiration) it will be worth the par ($1,000) since this is a premium bond. 2.Suppose your company needs to raise $30 million and you want to issue 30-year bonds for this purpose.