26. Scenario Analysis Consider a project to supply Detroit with 26,000 tons of machine screws annually for automobile production. You will need an initial $2,900,000 investment in threading equipment to get the project started; the project will last for five years. The accounting department estimates that annual fixed costs will be $345,000 and that variable costs should be $295 per ton; accounting will depreciate the initial fixed asset investment straight-line to zero over the 5-year project life. It also estimates a salvage value of $275,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $375 per ton. The engineering department estimates you will need an initial net working capital investment of $500,000. You require a 13 percent return and face a marginal tax rate of 24 percent on this project. a. What is the estimated OCF for this project? The NPV? Should you pursue this project? b. Suppose you believe that the accounting department's initial cost and salvage value projections are accurate only to within +15 percent; the marketing department's price estimate is accurate only to within +10 percent; and the engineering department's net working capital estimate is accurate only to within +5 percent. What is your worst-case scenario for this project? Your best-case scenario? Do you still want to pursue the project? 27. Sensitivity Analysis In e Problem 26, suppose you're confident about your own projections, but you're a little unsure about Detroit's actual machine screw requirements. What is the sensitivity of the project OCF to changes in the quantity supplied? What about the sensitivity of NPV to changes in quantity supplied? Given the sensitivity number you calculated, is there some minimum level of output below which you wouldn't want to operate? Why?

Last year Carson Industries issued a 10-year, 15% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,075 and it sells for $1,280. What is the bond's nominal yield to maturity? Do not round intermediate calculations. Round your answer to two decimal places.%What is the bond's nominal yield to call? Do not round intermediate calculations. Round your answer to two decimal places.%Would an investor be more likely to earn the YTM or the YTC?   What is the current yield?

Can you make QBI easier to understand? Can you say what the steps are?

1. What is a case and how to defining the Case and Creating Problem Statements? 2. What is Background of the Problem and Problem Statement?