Net revenues at an older manufacturing plant will be $2 million for this year. The net revenue will decrease 15% per year for 5 years, when the assembly plant will be closed (at the end of Year 6). If the firm’s interest rate is 10%, calculate the PW of the revenue stream.

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A: If cash flows are uneven,then  Payback period(PBP)=Years before full recovery+ (uncovered cost at…

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Q: Which is the answer? show steps with your formulas. Thank you

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A: F/A is taken from table FV of an annuity of $1.

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A: In this we have to calculate present value of all and decide what is required period.

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A: Here, we need to equate the present value of the cost and revenues. PV of cost now = PV of base…

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A: Equivalent annual worth can be computed by determining the difference between the equivalent annual…

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A: Cost per year is $95,000  Time period is 5 years At year, manufacturer mistakenly spends $55,000…

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A: Equivalent annual cost is yearly cost of operating, maintaining and owing asset over its full life.

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A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

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A: Given PV=5000 Increasing =500 n=15 r=0.06 or 6%

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A: Information Provided: Initial cost = $165,126 Annual maintenance cost = $10,831 Annual Income =…

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A: Net present value or annual worth is the present value of all the cash flows. It is used in capital…

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A: An initial investment of new machine = $153703 Annual maintenance cost = $11339 Annual income =…

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A: Capital budgeting The variance between Cash inflow (PV) and cash outflow (PV) over a time period at…

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A: Total sale = 5 million Increase in sale = 10% Employees bonus = 2% of sales  Interest rate = 8%…

Q: A company expects the cost of equipment maintenance to be $5,000 in year one, $5,500 in year two,…

A: Answer -  Given,  Maintenance Cost = $5000 Gradient G = $500 I = 5%

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A: Here, we have been given the real discount rate, which is 8%. Both salvage value and overhaul costs…

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A: A= P(1+r/n)nt   A= Future Value= 3,00,000 P= Initial amount r= Interest Rate n= No. of compounding=…

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Q: A company is considering the purchase of a new machine for $58,000. Management predicts that the…

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Q: Pittsburgh Custom Products (PCP) purchased a new machine for ram cambering large I beams. PCP…

A: The question is based on the concept of calculation of present value of expected future revenue .…

Q: ny expects the cost of equipment maintenance to be $5,000 in year one, $5,500 in year two, and…

A: The given problem can be solved using NPV function in excel.

Q: A company expects the cost of equipment maintenance to be $5,000 in year one, $5,500 in year two,…

A: The worth of a predicted revenue stream assessed as of the date of valuation is known as present…

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A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: A company receives 13.78% per year from accounts. They are considering a project that will force…

A: present value of annuity (PVA): PVA=A×1-11+RNRwhere,A=annuityR=interest rateN=number of years…

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A: The net gain or loss of an investment over a specific time stated as a percentage of the…

Q: A machine costs £16,000 and has a 5-year life. The required rate of return is 10%. By how much can…

A: Depreciation= 30%* Opening value

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.