A project currently generates sales of $14 million, variable costs equal 50% of sales, and fixed costs are $28 million. The firm's tax rate is 40%. Assume all sales and expenses are cash items. a. What are the effects on cash flow, if sales increase from $14 million to $15.4 million? (Input the amount as positive value. Enter your answer In dollars not In mllons.) Cash flow increases by s 420,000 b. What are the effects on cash flow, if variable costs increase to 60% of sales? (Input the amount as positive value. Enter your answer In dollars not In mlllons.)

4. Your firm is evaluating a project that should generate revenue of P4,600 in year 1, P5,200 in year two, P5,900 in year three, and P5,700 in year four. The firm receives each cash flow at the end of each year. If your firm's required return is 12%, what is the future value of these cash flows at the end of year four? a.P16,074.51b.P22,583.53c.P25,293.55d.P28,328.77

Hh.17.

27.

Referring to the table below, calculate the Net Present Value (NPV) and Profitability Index (PI). The required rate of return for these projects is USD10%. The projects’ expected cash flows are as follows:             Year Machine 1 (USD) Machine 2 (USD) 0 (17,000) (17,000) 1 8,000 2,000 2 7,000 5,000 3 5,000 9,000 4 3,000 9,500

A company is considering a 10-year capital investment project. The project has annual positive cash flows each year. The accounting manager has calculated the NPV of the same project using three different costs of capital (8%, 10% and 18 %) as discount rates. Select the most logical combination of NPVS from the choices given. Note: You cannot calculate the NPVS nor do you need to. O $(5,743) $3,152 $6,612 O $(5,743) $6,612 $3,152 $3,152 $6,512 $(5,743) O $6,512 $3,152 $(5,743) O None of the above

HMT Co is considering a project with the following cash flows. Year Initial investment cost cash inflows Net cash flows Variable (000) RO. (000) RO. (000) RO. (000) RO. 6,000 3,000 7,000 4,000 2 3,000 7,000 4,000 Cash flows arise from selling 750,000 units at RO.12 per unit. HMT Co has a cost of capital of 9%. You are required to calculate the sensitivity % of the variable initial investment. a. 17.27% b. None of the options c. 18.27% d. 16.27%

For the given cash flows, suppose the firm uses the NPV decision rule. Year Cash Flow 0 –$ 148,000 1 64,000 2 75,000 3 59,000 a. At a required return of 12 percent, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. At a required return of 21 percent, what is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Dixon Sisters has a project with the after-tax cash flows shown below. The required return (cost of capital) on the investment is 10%. Compute the: Payback b. Discounted payback c. NPV d. Profitability index e. IRR MIRR YEAR             0           1            2        3       4  Cash flow −70,000 30,000 30,000 30,000 20,000

You are purchasing a factory at $550,000. Your projected cash flow streams from the factory will be $135,000 in year 1, $152,000 in year 2, and $285,000 in year 3. What is the rate of return on this factory investment?