Valve Corporation spent P600,000 per year for the past 3 years in developing their latest product. The company optimistically hopes to recover its investment in 5 years on a single contract beginning immediately (year 0). The company is negotiating a contract that will pay P250,000 now and a to-be agreed-upon annual increase of a constant amount each year through year 5. How much must the income increase (an arithmetic gradient) each year, if the company wants to realize a return of 15% per year?

Q: pplegate Industries is planning to expand its production facility in a few years. New plant…

A: Number of Years = 3.5 Periods per year = 4 (interest rate compounded quarterly) Nominal rate= 8%…

Q: Nippon Steel's expenses for heating and cooling a large manufacturing facility are expected to…

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

Q: Verizon Communications said it plans to spend $22.9 billion to expand its fiber-optic Internet and…

A: F=PF/P i, n P=CustomersAverage IncomeP/A i, n+CustomersAverage IncomeCustomer baseP/G i,…

Q: A pulp and paper company is planning to set aside $150,000 now for possibly replacing its large…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: McMillan Company manufactures electronic flow sensors that are designed as an alternative to…

A:

Q: MLX has annual sales of $320 million per year and has calculated the collection float to be 12 days.…

A: Collection float means that the amount deposited by customer but that is not available for use. So…

Q: A manufacturer of toilet flush valves wants to have ₱15,000,000 available 10 years from now so that…

A: The given problem relates to concept of annuity. An annuity is a series of uniform cash flows over a…

Q: A retail coffee company is planning to open 90 new coffee outlets that are expected to generate…

A: Expected cash flows at the end of year 1, C1 = $ 15.6 mnGrowth rate in the cash flows, g = 3.4% in…

Q: XYZ Company is building an addition (building and machinery) to its manufacturing plant to increase…

A: The amortization schedule gives information to the lender and borrower about the loan payments due…

Q: A company is considering buying workstation computers to support its engineering staff. In today's…

A: Given: i = 16%, f = 10% To Find the amount of payment, first we have to calculate i: i = i - f…

Q: A software company that installs systems for inventory control using RFID technology spent $600,000…

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

Q: Elearning Company would like to develop its technology process by purchasing a production equipment…

A: Net present value is the difference between the present value of cash inflows and present value of…

Q: Employees at JPGR Inc have been busy evaluating a potential new $9 million investment for their firm…

A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…

Q: Applegate Industries is planning to expand its production facility in a few years. New plant…

A: Future Value = Present Value x Future Value Factor

Q: Downtown Partners is considering an investment of $500,000 in an early stage company, Newco.…

A: The required rate of return means the least profit an investor expects to collect from the…

Q: An investment of $200,000 is required to expand a certain production facility in a manufacturing…

A: Equivalent operating cost for the project is calculated as follows: First calculate the inflated…

Q: Bennett Industries invested $10,000,000 in a coventure one year ago. One year later, Bennett…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: A company is considering expanding their production capabilities with a new machine that costs…

A: The buying decision of the company is depend upon the future revenue and the cost with the adoption…

Q: Nippon Steel’s expenses for heating and cooling a large manufacturing facility are expected to…

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

Q: Thompson's has determined that a new project has expected fixed costs of $132,378, a contribution…

A: The point where total revenues are equal to total expenses incurred from production is called the…

Q: A company that manufactures a revolutionary aeration system combining coarse and fine bubble…

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

Q: A firm, whose cost of capital is 9 percent, may acquire equipment for $110,783 and rent it to…

A: Net Present Value (NPV) is a capital budgeting technique which uses a discount rate to bring all the…

Q: TEME is a manufacturer of toy construction equipment. If it pays out all of its earnings as…

A: The company's current earnings: 0.3 per quarter so the year long earnings will be: 0.3 x 4 = 1.20 If…

Q: A company is considering the purchase of a new machine for P480,000. Management predicts that the…

A: Payback period: The payback period refers to the total years needed to cover the initial cash…

Q: Hurkin Manufacturing Company pays accounts payable on the tenth day after purchase. The average…

A: Working capital is the cash needed to run a firm on a day-to-day basis, such as purchasing raw…

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

A: In the first 3 years Number of beams per year = 50 Price of per beam = $1,200 For the next 12 years…

Q: Nippon Steel's expenses for heating and cooling a large manufacturing facility are expected to…

A:

Q: Microsoft Co. places 150,000 in an investment that has a return of 8%.     The investment is placed…

A: given, PV = 150,000 r=8% n = 12 years withdrawal year = 6

Q: A software company that installs systems for inventory control using RFID technology spent $720,000…

A: The calculation is:

Q: The optical products division of Panasonic is planning a $3.5 million building expansion for…

A: The present value of an annuity is the current worth of a cash flow series at a certain rate of…

Q: A firm has installed a manufacturing line for packaging materials. The firm plans to produce 45 tons…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: Company B is expecting a total sale to be 5 million in the first year and will increase by 10% each…

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

Q: A business industry has a new product whose sales are expected to be 1.2, 3.5, 7, 5, 3 million units…

A: The Present worth method means computing the Present value of all the cashflows generated from the…

Q: A major electronics manufacturer expects to generate additional revenue from its recently won…

A: Future worth is the value of the present cash flows after certain period. Due to interest that can…

Q: A printing press machine has a cash equivalent of P250,000. For the first three years, it will…

A: Initial cost (C) = P 250000 Profit in year 1 (A1) = P 20000 A2 = P 20000 A3 = P 20000 A4 = P 35000…

Q: The optical products division of Panasonic is planning a $3.5 million building expansion for…

A: Calculation of uniform amount per quarter: Answer: Uniform amount per quarter is $372,932.60

Q: A company is considering expanding their production capabilities with a new machine that costs…

A: Here, Cost of Machine is $83,000 Additional Income per year is $9,000 Projet Lifespan is 10 years…

Q: An investment of P3M can be made in a business that will produce uniform annual revenue of P1.2M for…

A: Required Return = 20% Cash Flows: Year Cash Flow Reference 0 -3,000,000 First Cost 1 950,000…

Q: U.S. Steel is planning a plant expansion to produce austenitic, precipitation-hardened, duplex and…

A: Net Present Value (NPV) is the technique used to determine the net actual cash flow in the present…

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: How much will be the equivalent worth of ₱2M invested today for three years at a commercial rate of…

A: The equivalent worth of the amount can be calculated using the formula of the future value.

Q: TEME is a manufacturer of toy construction equipment. If it pays out all of its earnings as…

A: Value of the company=Earnings Expected rate of return

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…

Q: Consider a machine that costs P20,000 and has a five years useful life. At the end of the five…

A: The question is based on the concept of Financial Management.

Q: Leyton Lumber Company has sales of $12 million per year, all oncredit terms calling for payment…

A: Capital refers to the desired amount of cash and other financial assets  such as stocks, bonds,…

Q: Net revenues at an older manufacturing plant will be $2 million for this year. The net revenue will…

A: The present value of the cash flow is the current worth of a cash flow at a certain rate of interest…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.