Step 2 Calculation and Conclusion NAL =Cost of equipment - OCF*(PVIFA@5.12%,4 Years) =6300000 - 1683800*3.536 346083.2 Since Net Advantage to leasing is positive, Leasing is better option Can I know how to calculate manually
Q: project requires $ 80,000 end produces a A on Pnitial out lay of return of $20,000 end of year 1 , $...
A: Initial outlay (CF0) = $80,000 Year 1 cash inflow (CF1) = $20,000 Year 2 cash inflow (CF2) = $30,000...
Q: A family wishes to buy a $235,900 home. - If a conventional lender is willing to loan the family 87...
A: Federal housing administration loan helps people with a moderate income to get a mortgage loan for a...
Q: Kevin is 25 years old and just finished taking a Personal Finance class. He wants to start a invest...
A: 7a) Future value needed (F) = $1000000 Years to accumulate (n) = 30 r = 12% per annum Let the one in...
Q: Company ABS’s Cash Conversion Cycle has 241.46 days while Company CBN has 194 days of CCC. Which com...
A: The cash conversion cycle depicts the movement of the cash from the investing period to the harvesti...
Q: You put 280,000 dollars in a bank which gives you 0.75% interest compounded daily. If you leave that...
A: The amount of interest earned can be computed with the help of future value function
Q: If the accounts receivable turnover ratio is decreasing, what will be happening to the average colle...
A: Accounts receivable turnover ratio is an important activity ratio. This ratio shows how many times a...
Q: ingalls Engineering is a manufacturer that produces bracket assemblies. Demand for bracket assemblie...
A: In the given case , X is a bracket assembly which company manufactures. Various items A B C D E F G...
Q: Explain briefly what cross hedging implies. What is the significar
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...
Q: You decide to originate the loan, but move at the end of 5 years. What is the remaining balance you ...
A: Loan Amount $ 3,00,000.00 Time Period 30 Years Interest Rate 7.20%
Q: What is LVMH's capital structure? If it has debt, will it be able to generate the future required ca...
A: With all the analysis, we can conclude that LVMH is harmless. Its market value is said to be rising ...
Q: Explain why the weighted average cost of capital (WACC) is used in capital budgeting.
A: WACC = multiplying the cost of each capital source (debt and equity) by its relevant weight by marke...
Q: Explore the amount $1 is discounted for different compound interest rates across time. The graph sho...
A: Given, PVN=1FVN=$11+iN
Q: A$14,500 bond that has a coupon rate of 5.80% payable semi-annually and maturity of 5 years was purc...
A: Par value (FV) = $14,500 Coupon rate = 5.80% Semi annual coupon amount (C) = 14500*0.0580/2 = $420.5...
Q: Bond valuation Bond X is noncallable and has 20 years to maturity, a 7% annual coupon, and a $1,000...
A: Hi! Thank you for the question , As per the Honor code , we are allowed to answer the one question i...
Q: Q1. Tom Fong Music Inc., has an outstanding bond callable at $1,340. The total value of the bond is ...
A: Solution : C : $ 40.20 Millon
Q: You purchased 100 shares in a real estate investment trust for $50 a share. The trust paid the follo...
A: Annualized returns is return earned over the period of single year by holding the investment.
Q: Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of...
A: Net present value is the sum of the present value of net of cash outflows and inflows discounted at ...
Q: Flyers plc operates public transport services in major cities in the United Kingdom (UK). The compan...
A: Capital budgeting decisions refer to the decisions made for investing and procuring the money in an ...
Q: Alternative atio 30% ratio 70% FDebt 10%
A: Earnings per share per share is calculated by dividing a firm ’s profit by the number of outstanding...
Q: he purchase price of a front vith its purchase, is $117,450. The life of the loader is 6 years, at w...
A: The equipment is going to be decrease in value and with use of equipment annually the value of equip...
Q: Rolling Company bonds have a coupon rate of 6.00 percent, 24 years to maturity, and a current price ...
A: Solution:- Yield to maturity (YTM) of a bond means the rate of return the bond is yielding. We know,...
Q: necessary, refer to the list of financial formulas. (a) Assuming no withdrawals are made, how much m...
A: Future value of investment is the the principal amount deposited and interest accumulated over the p...
Q: 10. Sunny Corp. had a net income during 2018 of $165m, and after payir out dividends to shareholders...
A: Since you have asked multiple questions, we will answer the first question for you. Please post ques...
Q: ABD Company's manufacturing overhead is 20% of its total conversion costs. If direct labor is PhP2,2...
A: Manufacturing overhead is referred as an indirect costs, which incurs at the time of production proc...
Q: You created and sold a futures contract 25 days ago. The contract at that time had a price of $60 an...
A: The rate of return of an investment with zero risk is known as the risk-free rate of return. It can ...
Q: On the exercise date, Blue Corporation has a put option for 100 tons of copper at an exercise price ...
A: Put option is a right to sell an underlying security at a predetermined price at a future date.
Q: What advantage does the fixed charge coverage ratio offer over simply using times interest earned?
A: The fixed-charge coverage ratio (FCCR) assesses a company's ability to cover fixed costs such as deb...
Q: 2. Private Markets are markets in which transactions are worked out directly between two parties. * ...
A: The term "private markets" refers to investments in privately held enterprises' equity and debt. Pri...
Q: Find the present value of the ordinary annuity. (Round your answer to the nearest cent.) $1500/semi...
A: Present value of the ordinary annuity can be calculated by annuity amount multiply with Present valu...
Q: Use the following table of spot rates: Years to Maturity Annual Effective Spot Rate 1 3.00% 2 3.60% ...
A: Interest rate swap It is a derivative in which two parties agree to exchange the future interest pay...
Q: In the equation the original amount for the investment is $840,000. Why in the first step of the sol...
A: Investment = $840,000 Profit = 1,500,000
Q: sers of ratios into short-term lenders, long-term lenders, and stockholders, which ratios would each...
A: Step 1 Ratios may be quite useful when deciding whether or not to invest in a company. Retail inve...
Q: Determine the number of days from Actual time to Approximate Time Loan Date- Feb. 5, 2021 End date...
A: In actual time, actual days in a month are considered. In approximate time, every month's days are 3...
Q: compounded monthly for any deposits made in the next month. If they deposit $10,000, then how much w...
A: Future value: It represents the future worth of the present sum of money. The future value is compu...
Q: Silver Inc. will be registering with SEC. Its incorporators was able to gather the following cost of...
A: The minimum rate of return a company will seek while investing in a project is the weighted average ...
Q: a) Assess the financial performance of BWealth Ltd using the information given. b) Briefly explain ...
A: Financial KPIs (key performance indicators) are metric entities used to track, measure, and analyze ...
Q: What is the net income for the BlueDragon cormpany given the following list of accounting iterns? no...
A: Solution:- Net income means the net profit available to a corporation after taking into consideratio...
Q: The price of a new car is $36,000. Assume that an individual makes a down payment of 25% toward the ...
A: The loan which is paid-off by making installment payments having two components as interest mount an...
Q: annually. Payments will be made at the end of each year. Find the total value of the annuity in 16 y...
A: Future Value of Annuity: It represents the future worth of the present annuity cash flow stream. It...
Q: r. Reyes borrows P600, e loan in 15 equal annual payments. How much of the original principal is sti...
A: Loans are paid by the equal annual installments these annual installment carry the payment for the p...
Q: 4. LSP Inc. reported the following financial facts at the year-end Dec 2018. Total Interest-Bearing ...
A: Based on the information available we will calculate the net income, taxes, and other costs.
Q: hat was the amount of each payment
A: Simple interest refers to the amount paid by the borrower to bank on the amount borrowed at a fixed ...
Q: 7. LSP Corporation has forecasted sales of $100,000, operating expenses excluding depreciation and a...
A: Bartleby honor code states that when various questions are asked, the expert should answer only the ...
Q: You can buy a carton of three 32-ounce bottles of shower cleaner on sale for $5.00. The 64-ounce "re...
A: Price of a carton of three 32-ounce bottles of shower cleaner = $ 5.00Price of 64-ounce "refill" siz...
Q: In comparing alternatives, I and J by the present worth method, the equation that yields the present...
A: Given in this question is the information regarding the Alternatives I and J . capitalized worth (C...
Q: 1. An investor deposits P10,000.00 at the end of each year in an account which gives a nominal annua...
A: Annual deposit (A) = P 10000 Accumulated value = X n = 10 years r = 5% continuously compounded
Q: The present worth of package K is $ and that of package Lis $ (Click to select) offers the lower pre...
A: Net present value (NPV) of an alternative refers to the variance between the initial investment or p...
Q: What is the relevance of personal financial planning in a daily life of a student? And what is the s...
A: Financial planning is a systematic approach to achieving one's life goals. As you travel through lif...
Q: 1. Although Mutual funds and Hedge funds are regulated, they are not traded on exchanges * O True O ...
A: Mutual funds and hedge funds are both managed portfolios made up of pooled money with the purpose of...
| NAL | =Cost of equipment - OCF*(PVIFA@5.12%,4 Years) | |
| =6300000 - 1683800*3.536 | ||
| 346083.2 |
Since Net Advantage to leasing is positive, Leasing is better option
Can I know how to calculate manually
Step by step
Solved in 2 steps
- Objective: Should WAW lease or construct their own production facilityOption 1: ConstructCosts to incur:Buying land, construct building and getting ready for use$ 230,000Taxes, insurance, and repairs (per year)$ 30,000Intended years of use20Projected market value in 20 years$ 1,600,000Maximum down payment WAW can make$ 500,000Remainder in four payments of;$ 180,000Option 2: LeaseIntended years of use20First lease payment due now$ 100,000Rest of the lease payments (years 2-20)$ 90,000Operating costs to be paid by WAWRepairs (annual)$ 7,000Maintenance (annual)$ 25,000Initial one-time deposit, will be returned in year 20$ 40,000Required rate of return15%Methodology:The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction.Based on the analysis, they will recommend the preferred option (construction or leasing).Should WLW lease or construct their own production facilityOption 1: ConstructCosts to incur:Buying land, construct building and getting ready for use$ 360,000Taxes, insurance, and repairs (per year)$ 34,000Intended years of use20Projected market value in 20 years$ 1,600,000Maximum down payment WLW can make$ 500,000Remainder in four payments of;$ 160,000Revenue opportunityBuilding annex will be leased to a tenant and will generate a lease revenue (per year) for 10 years$60,000Option 2: LeaseIntended years of use20First lease payment due now$ 90,000Rest of the lease payments (years 2-20)$ 90,000Operating costs to be paid by WLWRepairs (annual)$ 9,000Maintenance (annual)$ 26,000Initial one-time deposit, will be returned in year 20$ 40,000Required rate of return15%Methodology:The consulting team is proposing to perform a NPV analysis and determine the benefit to leasing or construction.Based on the analysis, they will recommend the preferred option (construction or leasing).Amount Desired at End of Period Length of Time Rate Compounded $ 17,600.00 7 2% Quarterly Required: Complete the following using the information above and the present value Table 12.3 or the present value table in the Business Math Handbook or the present value formula to answer the following: Period Used Rate Used PV factor used PV of amount desired at end of period
- If the profit margin is 0.2158, asset turnover is 0.5389 and financial leverage is 1.2047, what is the return on asset? Multiple Choice 0.5389 0.1163 0.1401 0.6492Answer using excel: Machine A costs $316 and produces a profit of $106 at the end of each year for 7 years, while Machine B costs $128 and produces a profit of $71 at the end of each year for 4 years. Assuming the operation continues indefinitely and the cost of capital is 13%. Calculate equivalent annual value (EAV) to determine the better option. Enter EAV for Machine A below.Q3 Your client is considering the purchase of the following investment. A freehold office investment which is being marketed for £250,000. The property is producing a net income of £25,000 pa, receivable annually in arrears for the first 3 years. At the end of the 3rd year there is a rent review to the full market rent at that time. Rental growth is estimated at 5% pa. The current full market rent of the property is estimated to be £45,000 pa. At the end of the 6th year it is expected that the investment can be sold for £350,000. (i) Using a 10% pa target rate of return calculate the Net Present Value of the investment. (ii) Calculate the equated yield on the investment
- A company is thinking of investing in one of two potential new products for sale. The projections are as follows: Year Revenue/cost £ (Product A) Revenue/cost £ (Product B)0 (150,000) outlay (150,000) outlay 1 24,000 12,0002 24,000 25,3333 44,000 52,0004 84,000 63,333 Calculate the IRR for Product B only using 3% and 15% to 2 d.p.5.2 Use the information provided below to calculate the Internal Rate of Return (expressed to twodecimal places) using interpolation. INFORMATIONA machine with a purchase price of R1 200 000 is estimated to eliminate manual operations by R400 000 per year.The machine is expected to have a useful life of four years.Task: evaluate the payoffs from buying the asset versus using it on a lease arrangement. Given: The equipment costs €2000 000 Interest rate on debt 8%. Depreciation MARCS (Modified Accelerated Cost Recovery Sys): 35% first year; 40% second year, 15% third year; and 10% fourth year. Marginal tax rate = 30%. If the firms buys the equipment, there is a four year maintenance cost of €30 000 payable at the beginning of each year. If the equipment is leased: Firm could obtain a 4-year lease which includes maintenance. Rental payment would be €500,000 at the beginning of each year. Residual (salvage) value at t = 4: €200,000.
- Amount Desired at End of Period Length of Time Rate Compounded $ 8,900.00 4 6% Monthly Required: Complete the following using the information above and the present value Table 12.3, the present value table in the Business Math Handbook, or the present value formula to answer the following: Period Used Rate Used PV factor used PV of amount desired at end of periodUse AstroTurf Company's income statement below to answer the following questions.Operating costs (excl. depreciations & amortization): $4.5mDepreciation and amortization: $1.5mInterest: $0.7mNet Income: $2.8mTax Rate: 35% What level of sales would generate a net income of $4.2m for the following year, knowing that operating costs (excl. depreciation and amortization) will increase by 7.5%, and given a 35% tax rate. Provide a step-by-step explanation for how you arrived at your above solution as though you were teaching a student to solve this type of problem.*Subject : Accounting Samson Ltd is considering replacing equipment. The cost on 1.1.2023 will be £3m. The expected economic life of the equipment will be 4 years. The company depreciates its equipment using the straight-line methods. The company expects to sell this equipment for £400,000, after the end of its useful economic life. There are expected cost savings arising from this investment of £1,200,000 in each of years 1 and 2 and £800,000 in each of years 3 and 4. What is the payback of this investment? Select one answer: 2 years 3 years 2 years and 9 months 3 years and 2 months