Calculate the financial break even for the following details 1. required return =9% 2. accounting break even 10% 2. cash break even 50 (without tax) O 130 Units O 260 Units O 560 Units
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- What is the cash break-even point? Ignore Taxes. Price = $127 per unit; variable cost = $57 per unit; fixed cost = $105,000 per year; depreciation = $5,000 per year. Answer in handwritten formula, NOT EXCEL pleaseGreen Corporation anticipates a cash requirement of P1,500 over a 1- month period. It is expected that cash will be paid uniformly. The annual interest rate is 24 percent. The transaction cost of each borrowing or withdrawal is P30. (a) What is the optimal cash balance? (b) What is the average cash balance? CHOOSE THE CORRECT ANSWER FOR A AND B(A) P1,432.05 and (B) P566.03(A) P2,121.32 and (B) P8060.66(A) P1,121.32 and (B) P1060.66(A) P2,121.32 and (B) P1060.66(A) P1,732.05 and (B) P866.03What is the annual operating free cash flow if operating revenues increase by $1.2 million, operating expenses (ex-depreciation) go up by $0.7 million, and depreciation goes up by $0.32 million? The tax rate is 31%. Express in $ million, to the nearest $0.001 mil. Drop the $ sign. E.g., if your answer is $506,500, record it as 0.507.
- A company forecasts free cash flow of $400 at Year 1 and $600at Year 2; after Year 2, the FCF grow at a constant rate of 5%.The company forecasts the tax savings from interest deductionsas $200 in Year 1, $100 in Year 2; after Year 2, the tax savingsgrow at a constant rate of 5%. The unlevered cost of equityis 9%. What is the horizon value of operations at Year 2?($15,750.0) What is the current unlevered value of operations?($14,128.4) What is the horizon value of the tax shield at Year 2?($2,625.0) What is the current value of the tax shield? ($2,477.1)What is the levered value of operations at Year 0? ($16,605.5)Your income is $80,000 a year. Bonds earn 6.5% interest. Converting from bonds to cash costs $25 per transaction. Given the assumptions of the inventory model, what is the optimum number of cash conversions per year? [Express your number rounded off to one decimal place.] 7. Extending from #6, what is your money demand? 8. Extending from #6, but where budget cuts have squashed your income down to $50,000 per year and the cost of bond conversion has risen to $50 per transaction. Now what is the optimal number of conversions per year? [Express your number rounded off to one decimal place.]ABC Corporation is deciding whether to change the credit term from 1/15, n/60 to 2/10, n/40 to speed up cash collections. Its original forecasted sales and average age of receivables are P7,000,000 and 63 days. With the new credit term, sales would decrease by 5% but the average age of receivables will be 42 days. ABC's variable cost rate is 55% while its weighted average cost of capital is 17%. How much is the benefit from the change in average receivable balance?
- What amount of cash must be invested today in order to have $60,000 at the end of one year assuming the rate of return is 9%? (Do not round your PV factors.)A. $54,600.00B. $45,454.56 C. $55,045.88 D. $54,000.00A firm currently sells $500,000 annually with 3% bad debt losses. Two alternative policies are available. Policy A would increase sales by $300,000, but bad debt losses on additional sales would be 8%. Policy B would increase sales by an additional $120,000 over Policy A and bad debt losses on the additional $120,000 of sales would be 15%. The average collection period will remain at 60 days (6 turns per year) no matter the policy decision made. The profit margin will be 20% of sales and no other expenses will increase. Assume an opportunity cost of 20% Make no policy change. Change to only Policy A. Change to Policy B (means also taking Policy A first). All policies lead to the same total firm profit, thus all policies are equal. Need explanation and calculationFinance Whadden National Bark is undertaking statec GAP analysis. In the one yoar time bucket, it holds $43 million in rate-sen income if interest rates are expected to change by 1.28%? . Round your final answer to the nearest dollar (Ex. $O) and submit decreases as a negative.
- A company is planning to expand its business is costing OMR 24271. The following cash inflows are expected. Calculate Profitability index given the rate of discounting to be 3.008% Years Machine A 1 11055 2 13300 3 12500 4 14500 Select one: a. none of the options b. 0.510 c. 23311.416 d. 1.960 e. 1.974The credit terms of a firm currently is “net 30”. It is considering to change it to “net 60”. This will have the effect of increase in firm’s sales. As the firm will not relax credit standards, the bad debt losses are expected to remain at same percentage, that is, 3% of sales. Incremental production, selling and collection costs are 80% of sales and expected to remain constant over the range of anticipated sales increases. The relevant opportunity cost for receivables is 15%. Current credit sales are Rs. 300 crore and current level of receivables is Rs 30 crore. If credit terms are changed, the current sale is expected to change to Rs 360 crore and firm’s receivables level will also increase. The firm’s financial manager estimates that new level of credit terms will cause firm’s collection period to increase by 30 days. Determine the present collection period and the collection period after the proposed change in credit terms. What level of receivables is implied by the new…Part AUsing the following free cash flows and cost of equity = 7%, discount FCF year 1 back to time 0 (today). FCF year 1 = 500; FCF year 2 = 520; FCF year 3 = 560; FCF year 4 = 590; FCF year 5 = 610 a) 429.36 b) 467.29 c) 512.85 d) 422.10Part B Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21%, discount the year 4 expected payment back to time 0 (today). Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0 a) 9.31 b) 10.11 c) 13.65 d) 6.50
