The following data are given for Encino Aluminium Company: Initial cost of proposed equipment $75,000 Estimated useful life 7 years Estimated annual profit $18,000 Predicted residual value at the end of the useful life $ 3,000 Cost of capital (required rate of return) 12% Compute the present value of the estimated annual profit.
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- ements What is the total Wealth Accumulation of the following investment assuming the available after tax reinvestment rate is 5%? IRR 10.70% O $4,690,000 O $4,821,078 O $4,848,844 $4,905.989 n 0 $ 1 S 2 $ 3 $ AS 5 $ Investment $ (3,000,000) 240,000 250,000 260,000 266,000 3,674,000$1,449,185 Sales $130,380 Operating Income Total Assets (investment) $544,102 Target Rate of Return (Cost of 15% Capital) What is return on investment? Input your answer to 1 decimal place. For example if you calculate.1892 enter 18.9.15. You work for the CEO of a new company that plans to manufacture and sell a new product, a watch that has an embedded TV set and a magnifying glass crystal. The issue now is how to finance the company, with only equity or with a mix of debt and equity. Expected operating income is $510,000. Other data for the firm are shown below. How much higher or lower will the firm's expected ROE be if it uses some debt rather than all equity, i.e., what is ROEL - ROEU? Do not round your intermediate calculations. 0% Debt, U 60% Debt, L
- Given 1275,000, S40,000 N = 5 i 16% Calculate the Capital Recovery amount a. none of the above O b. 55,000 O c. 78,171 O d. 93,509Encino Aluminium Company Year Cash Flow Cost of Capital 12% (75,000) 1 $ 2 $ 3 $ 18,000 18,000 18,000 4 $ 18,000 5 $ 6 $ 7 $ 18,000 18,000 18,000 24 3,000Capital Balances P80,000 40,000 Profit & Loss Ratio Brenda 60% 30% Cendra Darna 20,000 P140,000 10% 100% All assets and liabilities are fairly valued. Immediately after Andra's admission, what should be the capital balances of Brenda, Çendra, and Darna, respectively. P60,000;P30,000;P15,000 b. P69,000;P34,500;P16,500 P77,000;P38,500;P19,500 d. P92,000;P46,000;P22,000 а. с.
- A 1 Operating Capital 2 Net operating working capital 3 Long-term assets (Net FA) 4 Total operating capital 5 6 7 (million $) 9 NOPAT 8 Necessary investment in OP. Cap. 10 FCF B 11 12 13 14 O 2038 X X X X X X 2038 2039 80 70 120 20 2038 2039 420 540 EGE 11 X X 600 800 X X 1220 1430 X X 4000 4820 1000 1320 3000 3500 4220 C 18 19 (million $) 20 Sales 21 COGS 22 Depreciation 23 Other expenses 24 Tot. op. costs 25 EBIT 26 Intrest expense 27 Pre-tax ernings 28 29 Taxes (25%) 30 Net Income 31 32 33 34 15 16 Income Statement (Millions of Dollars) 17 Tax Rate D E F 2038 5,500 4500 300 350 5150 350 70 280 25% 70 210 G 2039 2039 6,000 5000 350 420 5770 230 120 110 25% 27.5 82.5 لاع H LO I Assets (million $) Cash Balance Sheet: Assets (Millions of Dollars) S-T investment Accounts receivable Inventories J Total current assets (CA) Gross fixed assets (FA) Less: Depreciation Net FA Total assets K Liabilities and Equity (million $) Accounts payable (A/P) Notes payable Accruals Total current…13 - ABC Company's selected financial statements items are given as following. Its cash and cash equivalent 5.000 TL, account receivable 8.000 TL, inventory 6.000 TL, financial debt 9.000 TL, account payable 7.000 TL for the year 2020. Calculate Operating Net Working Capital for 2020. a) O 7000 b) O -3000 c) O 4000 1383170 d) O 3000The following data pertain to Dakota Division's most recent year of operations. $ 17,500,000 200,000,000 65,000,000 Income Sales revenue Average invested capital Assume that the company's minimum desired rate of return on invested capital is 12 percent. Required: Compute Dakota Division's residual income for the year. Residual income 20 CE FB F6 F9 F10 Prisc Inse F11 F12 & 3 6 9. R U F
- q. 19 A frim has net working capital of $509, net fixed assets of $2,336, sales of $7,000 and current liabilities of $900. How many dollars worth of sales are generate from every $1 in total assets? $3.00 $1.83 $1.53 $2.16 $2.39Georgetown Berbice Income before tax. 20,000 75,000Required rate of return. 12% 12%Investment 100,000 500,000 Calculate the residual income for Georgetown a. 1,500 b. 150,000 c. 15,000 d. 8,000X tal assets of $5,000 and the following the coming year: Firm A Unlevered Economy Bad Average Good Probability 30.00% 40.00% 30.00% EBIT $500.00 $700.00 $900.00 Interest $0.00 $0.00 $0.00 EBT $500.00 $700.00 $900.00 Taxes (40%) -$200.00 -$280.00 -$360.00 Net Income $300.00 $420.00 $540.00 BEP 10.00% 14.00% 18.00% ROA 6.00% 8.40% 10.80% ROE 6.00% 8.40% 10.80% Now assume that the firm plans to issue $2,000 of debt, at an interest rate of 6.4 percent, and use the proceeds to repurchase equity (you may ignore potential impacts on price and assume that the firm will then have $3,000 of equity). Given this information, determine the standard deviation of the new ROE distribution. 3.487% 2.800% 2.653% 3.098% O 3.774%