18. What is the NPV of the following cash flows? The company uses an 11% discount rate.($168,000)$25,000$25,000$25,000Initial Cash FlowYear 1 Cash FlowYear 2 Cash FlowYear 3 Cash FlowYear 4 Cash Flow$0$75,000$75,000$80,000Year 5 Cash FlowYear 6 Cash FlowYear 7 Cash Flow$80,000$90,000$100,000Year 8 Cash FlowYear 9 Cash FlowYear 10 Cash FlowA. $121,348.25B. $146,456.34C. $109,322.75D. $131,942.65

Answered: 18. What is the NPV of the following…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 32BE

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Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The discount factor for year 1 is 0.89 and for year 2 is 0.80. The NPV is a. 0 b. 6,800 c. 1,400 d. (4,000)
Chasse Building Supply Inc. reported net cash provided by operating activities of $243,000, capital expenditures of $112,900, cash dividends of $35,800, and average maturities of long-term debt over the next 5 years of $122,300. What is Chasses free cash flow and cash flow adequacy ratio? a. $94,300 and 0.77, respectively c. $130,100 and 1.06, respectively b. $94,300 and 0.82, respectively d. $165,900 and 1.36, respectively
The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
Brook Corporation’s free cash flow for the current year (FCF0) was $3.00 million. Its investors require a 13% rate of return on (WACC = 13%). What is the estimated value of operations if investors expect FCF to grow at a constant annual rate of (1) −5%, (2) 0%, (3) 5%, or (4) 10%?
Provided the following information: Sales =$1,440,000, Cost of Goods Sold= $1,100,000, Inventory=$200,000, Receivables=$160,000, Payables=S100,000 and there are 365 days in a year. What is the cash conversion cycle for the firm? a. 113.55 Days b. 77.05 Days c. 150.05 Days d. 73 Days e. None of the above
A corporation makes an investment of $20,000 that will provide the following cash flows after the corresponding amounts of time:Year 1 - $10,000Year 2 - $10,000Year 3 - $2,000Should the company make this investment? What is the net present value at a 7 percent discount rate? Round your answer to two decimal points.
9) If total change in cash = $44,000, net operating cash flows = $22,000, and net investing cash flows= ($13,000); then net financing cash flows = A) $35,000. B) $45,000. C) $15,000. D) $25,000.
Calculate: Profits before and after taxes Change in cash EBITD Coverage ratio REVENUE 400,000 OPERATING COSTS 250,000 DEPRECIATION 25,000 INTEREST 20,000 PROFITS TAX 20%
The present value of the following cash flow stream is$7,300 when discounted at 8 percent annually. What is the value of the missing cashflow? Year Cash Flow1 $1,5002 ?3 2,7004 2,900
For the cash flows shown, calculate the equivalent annual worth in years 1 through 4 at an interest rate of 10% per year. Year 0 1 2 3 4 Cash Flow, $ 250,000 275,000 300,000 325,000 375,000
Year Cash Flow 0 −$8,200 1 2,500 2 4,100 3 3,900 What is the profitability index for the cash flows if the relevant discount rate is 10 percent? A. 1.079 B. 1.100 C. 0.995 D. 1.016 E. 1.048 What is the profitability index for the cash flows if the relevant discount rate is 16 percent? A. 0.939 B. 0.967 C. 0.986 D. 0.892 E. 0.911 What is the profitability index for the cash flows if the relevant discount rate is 26 percent? A. 0.795 B. 0.819 C. 0.834 D. 0.755 E. 0.771
What is CFF (Cash Flow Financing), given:Accounts Payable 100,000Accrued Expenses 50,000Increase in Bonds Payable 300,000Decrease in Equity 75,000Dividends Paid 80,000

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