The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 25 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Investment Sales revenue Operating costs Depreciation Net working capital spending Net income Cash flow $ Year 1 NPV 3,975 $ $ Year 0 Year O 34,000 $ 400 a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) Year 1 $ 17,500 3,700 8,500 450 Year 2 4,275 $ Year 1 5,300 $18,000 Year 2 Year 3 b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) Year 3 4,575 $ Year 2 3,800 3,900 8,500 8,500 500 400 $18,500 $15,500 3,100 8,500 ? Year 4 Year 4…

The management of XYZ Beverage Company is considering to purchase a new equipment to increase the production and revenues. The useful life of the equipment is 10 years. Initial cost of equipment is $30.000. Expected annual cash flows from new equipment is 75.000. Annual cash Outflows are : Cost of ingredients: $45,000; Salaries expenses: $13,500; Maintenance expenses: $1,500. Depreciation expense: $5,000. In that case what is payback time (as years) for this equipment? O A) 3,0 O B) 2,0 O C) 5,0 D) 3,5 E) 4,0

A company has just spent $189,000 in purchase of new equipment for its production business. This equipment is expected to generate an additional $55,000 in annual profit in the first year. The annual profit is projected to increase by 6% each subsequent year up to 10 years, the service life of the equipment. Calculate the present worth of this investment if the profits can earn an interest rate of 10% per year. OA. $427,457 OB. $220,734 OC. $914,980 OD. $236,632

27 - ))770 000 $ investment was made 7 years ago for a construction equipment. Annual revenue from the use of this machine is $140 000. A maintenance-repair expense of $3,000 was made for the first year, and $500 for each subsequent year, in addition to the previous year. The company plans to sell the construction equipment at the end of the year (9th year) after 2 years with a scrap value of 135,000 USD. Calculate the cash flow from 3 years ago.A) 134 500B) 135 500C) 140 000D) 133 500E) 135 000

Tooling for a robotic arm used in the automotive industry costs $15,000 and has an estimated salvage value of $1,000 at the end of a 3-year life. The second-year MACRS depreciation is closest to a. $5,000 b. $6,668 c. $4,667 d. $6,223 In preparing a cash budget for the last quarter of a calendar year, the opening balance for October is $95, 000. Throughout this month receipt from sales is $50,000 and total payments is $35,000. Depreciation on assets for this month is $500 and previous month’s receipt from sales is $60,000. What is November’s opening balance?   a. $75,500 b. $110,000 c. $49,500 d. $169,500

K A small company heats its building and spends $8,000 per year on natural gas for this purpose. Cost increases of natural gas are expected to be 8% per year starting one year from now (ie., the first cash flow is $8,640 at EOY one). Their maintenance on the gas furnace is $345 per year, and this expense is expected to increase by 15% per year starting one year from now (i.e., the first cash flow for this expense is $396.75 at the EOY one). If the planning horizon is 13 years, what is the total annual equivalent expense for operating and maintaining the furnace? The interest rate is 18% per year Click the icon to view the interest and annuity table for discrete compounding when /= 8% per year Click the icon to view the interest and annuity table for discrete compounding when = 15% per year. Click the icon to view the interest and annuity table for discrete compounding when / 18% per year. CREYES) The total annual equivalent expense for operating and maintaining the furnace is…

Return to question The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $48.0 million and having a four-year expected life, after which the assets can be salvaged for $9.6 million. In addition, the division has $48.0 million in assets that are not depreciable. After four years, the division will have $48.0 million available from these nondepreciable assets. This means that the division has invested $96.0 million in assets with a salvage value of $57.6 million. Annual depreciation is $9.6 million. Annual operating cash flows are $20.6 million. In computing ROI, this division uses end-of-year asset values in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Required: a. & b. Compute ROI, using net book value and gross book value for each year. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).) Answer is complete but not entirely…

6 Franklin Moran manages the cutting department of Greene Gibson Company. He purchased a tree-cutting machine on January 1, year 2, for $430,000. The machine had an estimated useful life of 5 years and zero salvage value, and the cost to operate it is $90,000 per year. Technological developments resulted in the development of a more advanced machine available for purchase on January 1, year 3, that would allow a 35 percent reduction in operating costs. The new machine would cost $270,000 and have a 4-year useful life and zero salvage value. The current market value of the old machine on January 1, year 3, is $210,000, and its book value is $344,000 on that date. Straight-line depreciation is used for both machines. The company expects to generate $233,000 of revenue per year from the use of either machine. Required a. Recommend whether to replace the old machine on January 1, year 3. b. Prepare income statements for four years (year 3 through year 6) assuming that the old machine is…

Flounder’s Custom Construction Company is considering three new projects, each requiring an equipment investment of $23,320. Each project will last for 3 years and produce the following net annual cash flows. Year   AA   BB   CC   1   $7,420   $10,600   $13,780   2   9,540   10,600   12,720   3   12,720   10,600   11,660   Total   $29,680   $31,800   $38,160   The equipment’s salvage value is zero, and Flounder uses straight-line depreciation. Flounder will not accept any project with a cash payback period over 2 years. Flounder’s required rate of return is 12%.Click here to view PV table.(a)Compute each project’s payback period. (Round answers to 2 decimal places, e.g. 15.25.) AA     years BB     years CC     years Which is the most desirable project? The most desirable project based on payback period is    Project AAProject BBProject CC   Which is the least desirable project? The least desirable project based on payback period is…