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- The Barrell Company is approached by a bank that offers to implement a lockbox system of receipts for the firm. If the new system is implemented, it will reduce float by 6 days per year. If Barrell's cost of capital is 11.5% and its annual sales are expected to be P10,00,000, then what is the maximum amount that Barrell is willing to pay for the lockbox system? O P164,438.56 O P18,904.11 O P1,150,000.00 O P1,890.41Riggs Corp. management is planning to spend $650,000 on a new marketing campaign. They believe that this action will result in additional cash flows of $276,000 over the next three years. If the discount rate is 17.5 percent, what is the NPV on this project?(Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 2 decimal places, e.g. 15.25.) The NPV is $ Crescent Industries management is planning to replace some existing machinery in its plant. The cost of the new equipment and the resulting cash flows are shown in the accompanying table. If the firm uses an 18 percent discount rate for project. Year Cash Flow 0 -$3,485,400 1 $871,710 2 $896,700 3 $1,104,400 4 $1,340,360 5 $1,450,600 What is the NPV of this project?(Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round intermediate calculations to 4 decimal places,…(gnore income taxes in this problem.) Your Company is considering an investment that has the following data: Year 2 5 Investment $20,000 Cash inflow $12,000 $12,000 $15,000 $4,000 $4,000 In what year does the payback period for this investment occur? Year 2. Year 3. Year 4. Year 5.
- 8. Unevencash flows A series, or stream, of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and nonconstant, but the concept of the time value of money applies to uneven cash flows as well. Consider the following case: Swanky Beverage Co. expects the following cash flows from its manufacturing plant in Palau over the next 6 years: Year Annual Cash Flows 1 $1,200,000 2 $3,650,000 $5,750,000 $4,400,000 $3,800,000 $4,500,000 3 4 5 6Oakland Chips, which has a 10 percent required return (K), is considering a new extractor. Because of anticipated start-up delays, cash flow will be $1.000 at the end of each year for years 4 through 20. What is the present value of those future cash flows? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.(Ignore income taxes in this problem.) Your Company is considering an investment proposal in which a working capital investment of S70,000 would be required. The investment would provide cash inflows of $7,500 per year for seven years. The company's discount rate is 10%. What is the investment's net present value? O S1,510 O $2,703 O $4,800 O $2,420
- F2. 1) A bank's one-year certificate of deposit will pay a specific fixed amount at the year-end. This means that the certificate will sell at a lower price if the interest is compounded semi-annually rather than annually. a) True b) False 2) A project with zero NPV will not recover the opportunity cost of capital invested in it. a) True b) False 3)A $40,000 consumer loan is to be paid off with monthly payments of $1,150.72. What monthly interest rate is to be paid? a) 1.0% b) 1.5% c) 2.0% d) 2.2% e) None of the aboveKohwe Corporation plans to issue equity to raise $50.7 million to finance a new investment. After making the investment, Kohwe expects to earn free cash flows of $10.4 million each year. Kohwe's only asset is this investment opportunity. Suppose the appropriate discount rate for Kohwe's future free cash flows is 7.7%, and the only capital market imperfections are corporate taxes and financial distress costs. a. What is the NPV of Kohwe's investment? b. What is the value of Kohwe if it finances the investment with equity? a. What is the NPV of Kohwe's investment? The NPV of Kohwe's investment is $ million. (Round to two decimal places.) b. What is the value of Kohwe if it finances the investment with equity? The Kohwe finances stment with equity $ million. (Round decimal places.)You are a research analyst for Bedrock Capital Management and are considering investing in Evergreen Landscaping, a chain of franchised landscaping businesses located in the Midwest. No sales of PP&E have taken place this year. You are trying to build some cash flow numbers for the calculation of Discounted Cash Flow valuation. The tax rate is 35%. There are no sales of PP&E in the current year. Using the table below, what is the Free Cash Flow to the Firm (FCFF)? Cash Flow From Operating Net Income NA Deprec & Amort Accounts Receivable 871 Accounts Payable -3,337 Inventory -1189 Prepaid Expenses 0 42 ST Notes 6 Cash Flow from Investing Capex - Purch of PP&E Cash Flow from Financing Revolving -899 Credit Facility Dividends Paid Long Term Debt Income Statement -152 Revenue -803 Cost of Goods Sold 329 Gross Profit Salaries & Benefits Rent Depreciation & Amortization Interest Expense 91,248 77,067 14,181 2,939 1,608 871 532
- The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment. 1. Using the Baumol model, how much would be the Sandbox’s minimum total costs associated with cash infusion? 2. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the holding costs associated with its cash investment? 3. Using the Baumol model, what level of cash infusion minimizes Sandbox’s costs associated with cash?National Co.’s evaluation of its cash outlay required indicates that it needs 500,000 for the year. Regardless of the amount. It incurs 30 to convert marketable securities to cash. The marketable securities earn an annual rate of 3%. Potter does not maintain buffer cash 1. How much is the optimal transaction size? 2. How much is the average cash balance? 3. How mich is the annual holding cost as a result of keeping cash on hand? 4.How many transactions should be there in a year? 5.How much is the total annual cost of cash?Consider a project lasting one year only. The initial outlay is $1,000 and the expected inflow is $1,290. The opportunity cost of capital is r = 0.29. The borrowing rate is rD calculations. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "O" wherever required.) 0.21. (Do not round intermediate 0.08, and the tax shield per dollar of interest is Tc a. What is the project's base-case NPV? Base-case NPV b. What is its APV if the firm borrows 39% of the project's required investment? Adjusted present value