Essay Hdc Case

The NPV of an investment proposal is found by adding the present values of all of its estimated

Free cash flows of the project for next five years can be calculated by adding depreciation values and subtracting changes in working capital from net income. In 2010, there will be a cash outflow of $2.2 million as capital expenditure. In 2011, there will be an additional one time cash outflow of $300,000 as an advertising expense. Using net free cash flow values for next five years and discount rate for discounting, NPV for the project comes out to be $2907, 100. The rate of return at which net present value becomes zero i.e.

Incremental cash flows is the difference between the cash flows a company will have if it implements the new project versus the cash flows the company will have if they choose not to embark

What are the amounts and timing of the follow-up expansion investment opportunity’s free cash flow from 2013 through 2022?

Calculate the incremental NPV from adding the laminate technology to the Collinsville plant. What is the NPV of the Collinsville plant with the laminate technology?

The NPV compares the inflow of cash against the flow of cash to make the investment. With the cash flows occurring over a period of time, NPV also takes into account the cost of capital. The cost of capital or discount rate allows the company to weigh the present value of capital today with the investment capital’s present value. Futronics Inc. investment would have an NPV of $138,642.39. The NPV of this investment would add value to Futronics Inc.’ worth.

Case 4: As of January 1, the Lohse Company owes the First Arbor Bank $350,000 which is due on December 31. Since Lohse seems unable to repay the note, the bank agreed that Lohse can “settle” this balance by agreeing to make four, annual installments on each of the next four years, provided that it adds a “due on

Commercial’s NPV is $.1516 million (see Table 3). This was determined by using the present values of the four year lease agreement between Prudent and Commercial. We concluded that Commercial’s discount rate will be 10% because of their opportunity cost. Commercial needs to have a residual value on the DAS of 6.8 million or greater, which will give them a positive net present value. Therefore, if their net present value shows negative, they would not want to lease to us. Assuming Commercial receives the same 5 year MACRS rate on the equipment purchase, then the system should be worth 7.01 million (book value) at the end of year 4 (see Table 4). This allows Commercial to have a positive NPV of $.1516 million (see Table 4). Therefore, they would be willing to lease the DAS to us.

6. You want to purchase a truck for $25,000 and you have $3,450 to put down. How much will your payments be if you financed the truck for 60 months at 6%?

The total current Assessed value is $850,000. During this time, Denver is on a growing trend and projected to continue. In the local area, new housing, new neighborhoods, new malls, and even schools are under way or in the planning stages. The Grande property is large and there are plenty of expansion options. The Grande’s have not come up with an asking price, but the local banks have offered to provide a 15-year note for a max of $624,000.

d) Calculate the new value per share after the capital structure change. (Hint: use your answers to parts b and c.)

With HCC using the building, it would still fulfill the bond promise in some way. “If you bought that building to rent it all out to Tesla, then you

At a price of $18.80 per square foot ($1,500,000/80,000 square feet), the deal seems in line with recent sales in the area as seen in Exhibit 5.

This would also indicate that HCA receives a lower rating. This could prove to be good and bad. In some instances, companies with lower ratings experience a rise in their cost of debt or loss access to the debt market. When Du Pont lost their AAA rating they did not experience any dramatic changes. With the growth rate at 15%, HCA has an opportunity to increase in the future. An ROE of 17.6% signifies efficiency and provides evidence that the company is heading in the right direction.

1312.5 (1.00625)60/ (1.00625) 60-1 = 1907.45 / 0.45 = 4207.97 B. Amortisation Table Amount Borrowed 210000 Periods 60 Rate 0.00625 Payment $4,207.97 Months Beginning