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Lapatulllka [165]
2 years ago
7

He Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $830,000,

and it would cost another $23,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $467,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $18,000. The sprayer would not change revenues, but it is expected to save the firm $360,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 25%. (Ignore the half-year convention for the straight-line method.) Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar.
What is the Year-0 net cash flow?

$

What are the net operating cash flows in Years 1, 2, and 3?

Year 1: $
Year 2: $
Year 3: $
What is the additional Year-3 cash flow (i.e, the after-tax salvage and the return of working capital)?

$

If the project's cost of capital is 14%, what is the NPV of the project?

$

Should the machine be purchased?


-Select-
Business
1 answer:
omeli [17]2 years ago
3 0
Blank blank blank to the power of two
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Suppose that you open a mutual fund account with a deposit of 500 dollars. 5 months later, the fund balance is 600 dollars, and
faust18 [17]

Answer:

The question is not complete, below is the complete question:

Suppose that you open a mutual fund account with a deposit of 500 dollars. 5 months later, the fund balance is 600 dollars, and you withdraw 216 dollars. A year after the account was opened, your balance is X dollars. If the dollar weighted and time weighted rates of return were the same, what is the rate of return? (Assume simple interest for the dollar weighted calculation.) Answer should be a percent!!!

Answer:

The rate of return is 48% on deposited fund.

Explanation:

The rate of return on investment is the percentage increase on an amount invested for a particular period of time, and to calculate this, we will use the simple interest formula:

I = P × R × T

Where:

P = principal = $500

R = rate in decimal ( %rate/100)

T = time = 5 months = 5/12 years

I = interest = Principal - final balance = 600 - 500 = $100

∴ 100 = 500 × R/100 × 5/12

100 = \frac{2500R}{1200}

120,000 = 2500R

∴ R = 120,000 ÷ 2500 = 48%

Therefore rate of return (R) = 48%

For a clearer understanding of the concept of interests, let us calculate for the balance after one year (X) as shown below:

I = P×R×T

T = 1 because, X is the balance after one year.

I = 500 × 48/100 × 1

I = $240

therefore the final amount after one year = interest + principal

= 240 + 500 = 740

but we were told that $216 was withdrawn at 5 months, hence the balance after one year = 740 - 216 = $524

8 0
3 years ago
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use
Jobisdone [24]

Answer:

$17,167

Explanation:

<em>The first step is to calculate amount of cash that would be charged</em>

<em>For 30 months, pay $520 per month for 30 months and an additional $10,000 at the end of 30 months.</em>

Present value is = 2,221

<em>Then</em>

<em>The present value of the payment options is =</em>

<em>($520 * PVA (24% 12,30) + $10,000 PV ( 24% 12,30))</em>

<em>$520 * 22.396 + $10,000 * 0.5521</em>

<em>$11646 + $ 5521</em>

<em>$17,167</em>

<em>Therefore the amount of cash the car dealer would charge is $17,167</em>

7 0
2 years ago
Joneen owns a farm. in a signed writing, joneen gave sue the irrevocable right to use a road on his farm so that sue could more
nadezda [96]
<span>Joneen gave Sue a cartway claim to access her own property across a portion of Joneen's property. This type of easement allows an individual to access their property via another, privately owned parcel for the purposes of accessing landlocked property.</span>
8 0
3 years ago
Suppose an investment offers to triple your money in 24 months (don't believe it). What rate of return per quarter are you being
Natasha2012 [34]

Answer:

30.77%

Explanation:

Assume investment = $1

Assume mount after 24 months = $5

Number of quarters in 24 months = 24/4 = 6

Future value = P*(1+r)^n; Where P is payment, r is interest rate per period, n is number of periods

5000 = 1*(1+i)^6

1*(1+i) = 5^(1/6)

1+i = 1.30766048601

i = 1.30766048601 - 1

i = 0.30766048601

i = 30.77%

So, the rate of return per quarter being offered is 30.77%

8 0
3 years ago
Narrow Falls Lumber has total assets of $913,600, total debt of $424,500, net sales of $848,600, and net income of $94,000. The
Black_prince [1.1K]

Answer:

The firm's sustainable growth rate is 13%.

Explanation:

The firm's sustainable growth rate can be calculated using the following formula:

Sustainable growth rate = Retention Rate * Return on Equity ............. (1)

Where;

Dividend payout ratio = 30%, or 0.30

Retention rate = 1 - dividend payout ratio = 1 - 0.30 = 0.70

Shareholder's equity = Total assets - Total debt = $913,600 - $424,500 = $489,100

Return on equity = Net income / Shareholder's equity = $94,000 / $489,100 = 0.19

Substituting the relevant values into equation (1), we have:

Sustainable growth rate = 0.70 * 0.19 = 0.13, or 13%

Therefore, the firm's sustainable growth rate is 13%.

3 0
2 years ago
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