Period Project Cash Flows C D -$6,000 -$2,500 $4,800 - $4,100 1 $5,800 - $4,400 -$6,000 $1,000 $12,400 $7,000 $2,000 $5,000 3 $8,200 $3,000 $4,000 $6,000
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Consider the following sets of investment projects, each of which has a three year investment life:
Compute the net future worth of each project at i = 16%.
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- Year Net cashflows 0 -575,000 1 £125,000 2 £248,000 3 £176,000 4 £146,000Sales : $250,000Costs : $134,000Depreciation : $10,200Operating expenses : $6,000Interest expenses : $20,700Taxes : $18,420Dividends : $10,600Addition to Retained Earnings : $50,080Long term debt repaid : $9,300New Equity issued : $8,470New fixed assets acquired : $15,000 You are required to:iv) Calculate the cash flow from assets v) Calculate net capital spending vi) Calculate change in NWCI. Operating ActivitiesNet income $ 50,000II. Long-Term Investing ActivitiesAdditions to property, plant, and equipment $ (250,000)III. Financing ActivitiesNet cash provided by financing activities $ 170,000IV. SummaryNet decrease in cash (30,000)Cash and equivalents at beginning of the year 55,000Cash and equivalents at the end of the year $ 25,000If accruals increased by $25,000, receivables and inventories increased by $100,000, and depreciation and amortization totaled $10,000, what was the firm’s net income?
- Given, Sales : $250,000Costs : $134,000Depreciation : $10,200Operating expenses : $6,000Interest expenses : $20,700Taxes : $18,420Dividends : $10,600Addition to Retained Earnings : $50,080Long term debt repaid : $9,300New Equity issued : $8,470New fixed assets acquired : $15,000 i) Calculate the operating cash flow ii) Calculate the cash flow to creditorsCash conversion cycle: Company X reported the following information for the last fiscalyear. COMPANY X Assets As of Liabilities and Equity 12/31/2021 Inventories USD 200 000 Accounts Receivable 180 000 Borrowings USD 190 000 Cash and financial assets 25 000 Accounts payable and 200 000 available for sale accruals Other current assets 18 000 Total current assets USD 423 000 Total current liabilities USD 390 000 Fixed Assets 500 000 Long-term debt 150 000 Equity 383 000 Total Assets USD 923 000 Total Liabilities & USD 923 000 Equities Net sales (credit) USD 800 000 Cost of goods sold 380 000 a. Calculate the firm’s cash conversion cycle and operating cycles b. What is the financing strategy of Company X? Aggressive or conservative? Is the strategyalready proper enough for the company? Please give your recommendation for them!Initial Outlay Cash Flow in Period CFo CF₁ CF2 -20,000 7,730.85 The IRR is approximately: O 18%. O 20%. O 16%. O 14%. 7,730.85 CF3 7,730.85 CF4 7,730.85
- HOME DEPOT CASH FLOW Fiscal 1985 Fiscal 1984 Fiscal 1983 Feb-86 Feb-85 Feb-84 CASH FLOWS FROM OPERATING ACTIVITIES Net income $8,219,000 $14,122,000 $10,261,000 depreciation $4,376,000 $2,275,000 $903,000 def income taxes $3,612,000 $1,508,000 $713,000 amortization $637,000 $93,000 net gain on sale ($1,317,000) other $180,000 $77,000 $59,000 Increase in a/r ($15,799,000) ($7,170,000) ($1,567,000) increase in inventory ($68,654,000) ($25,334,000) ($41,137,000) increase in prepaids ($587,000) ($1,206,000) ($227,000) increase in a/p $21,525,000 $10,505,000 $17,150,000 change in accrued salary $1,578,000 ($93,000)…Assets 2001 2000 Cash 7,282 9,000 Short term investment 0 48,600 Acc. Receivable 632,160 351,200 Inventories 1,287,360 715,200 Total current assets 1,926,802 1,124,000 Fixed Assets Plant & Equipment 1,202,950 491,000 Less: Acc dep 263,160 146,200 939,790 344,800 Total assets 2,866,592 1,468,800 Liabilities & Equities Current liability A/c Payable 524,160 145,600 Notes payable 720,000 200,000 Accruals 489,600 136,000 total Current liability 1,733,760 481,600 Long-term debt 1,000,000 323,432 Common Stock 460,000 460,000 Retained Earning -327,168 203,768 1,132,832 987,200 Total equities 2,866,592 1,468,800 Income Statement Sales 5,834,400 3,432,000 Cost of Goods Sold 5,728,000 2,864,000 Other expense 680,000 340,000 dep 116,960 18,900…Sales : $250,000Costs : $134,000Depreciation : $10,200Operating expenses : $6,000Interest expenses : $20,700Taxes : $18,420Dividends : $10,600Addition to Retained Earnings : $50,080Long term debt repaid : $9,300New Equity issued : $8,470New fixed assets acquired : $15,000You are required to:i) Calculate the operating cash flow ii) Calculate the cash flow to creditors iii) Calculate the cash flow to shareholders iv) Calculate the cash flow from assets v) Calculate net capital spending vi) Calculate change in NWC
- Given, Sales $250,000 Cost $134,000 Depreciation $10,200 Operating Expenses $6,000 Interest Expenses $20,700 Taxes $18,420 Dividends $10,600 Addition to Retained Earnings $50,080 Long Term Debt Repaid $9,300 New Equity Issued $8,470 New fixed assets acquired $15,000 Calculate the Cash Flow From Assets Calculate the change in NWCSales : $250,000Costs : $134,000Depreciation : $10,200Operating expenses : $6,000Interest expenses : $20,700Taxes : $18,420Dividends : $10,600Addition to Retained Earnings : $50,080Long term debt repaid : $9,300New Equity issued : $8,470New fixed assets acquired : $15,000 You are required to:i) Calculate the operating cash flow ii) Calculate the cash flow to creditors iii) Calculate the cash flow to shareholdersComparative Balance Sheet Current Year Previous Year Year Before Current Assets Cash $50,000 $100,000 $90,000 Accounts Receivable, net $275,000 $150,000 $100,000 Inventory $580,000 $400,000 $250,000 Prepaid Expenses $25,000 $30,000 $10,000 Total Current Assets $930,000 $680,000 $450,000 Property & Equipment, net $115,000 $150,000 $140,000 Total Assets $1,045,000 $830,000 $590,000 Liabilities & Owner's Equity Current Liabilities Accounts Payable $410,000 $265,000 $190,000 Short-term Payables $175,000 $90,000 $50,000 Total Current Liabilities $585,000 $355,000 $240,000 Long Term Bonds Payable (12%) $50,000 $150,000 $150,000 Total Liabilities $635,000 $505,000 $390,000 Stockholder's Equity Common Stock (100,000 shares)…