Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $46 each with expected sales of 4,650 tops annually. By adding the fleece tops, management feels the firm will sell an additional 320 pairs of jeans at $58 a pair and 455 fewer T-shirts at $19 each. The variable cost per unit is $29 on the jeans, $9 on the T-shirts, and $24 on the fleece tops. With the new item, the depreciation expense is $26,000 a year and the fixed costs are $79,500 annually. The tax rate is 40 percent. What is the project's operating cash flow? Multiple Choice $15,782 $26,918 $21,412 $21,242
Q: Consider a three-factor APT model. The factors and associated risk premiums are: Factor Risk Premium…
A: Stock returns:Stock returns refer to the financial gains or losses that an investor experiences…
Q: JRN Enterprises just announced that it plans to cut its next-year dividend,D1, from $2.25 to $1.20…
A: Stock price= $24.50Growth rate= 4%Expected dividend= $2.25Expected dividend after decline=…
Q: Loan payments of $1725 due today, $510 due in 75 days, and $655 due in 323 days are to be combined…
A: Here, Amount due today of loan $ 1,725.00Amount due in 75 days $ 510.00Amount due in 323 days $…
Q: An investor buys a 6% annual payment bond with three years to maturity. The Dond has a…
A: Duration of bond is weighted period required to recover the all cash flow from the bond and it shows…
Q: Derry Corporation is expected to have an EBIT of $2,600,000 next year. Increases in depreciation,…
A: Here,EBIT $ 2,600,000.00Taxes 23%Depreciation $ 160,000.00Net Capital Spending $…
Q: A firm has a market value equal to its book value. Currently, the firm has excess cash of $7,000 and…
A: The process of evaluating a stock's intrinsic or fair value involves weighing a number of variables,…
Q: Laurel Enterprises expects earnings next year of $4.43 per share and has a 50% retention rate, which…
A: Dividend per share = Earnings per share x (1- retention ratio)=>Expected dividend per…
Q: stimate the duration of a par-value bond w
A: Duration is the time taken for the bond to recoup the initial investment. It is represented in…
Q: You have a loan outstanding. It requires making eight annual payments of $3,000 each at the end of…
A: Future value is that amount which will be require to paid at some specified period of time. It…
Q: the new value of the bond will be approximately
A: We can determine the new price of the bond using the formula below:Bond prices and yield have an…
Q: Arnold Inc. is considering a proposal to manufacture high-end protein bars used as food supplements…
A: NPV is defined as the sum of the present values of all future cash inflows less the sum of the…
Q: You have a risk-free bond with 2 years to maturity. The bond has a face value of $ 1000 and a coupon…
A: Bond refers to the debt market security which offers the investor a fixed set of payments for a…
Q: Net present value method The following data are accumulated by Geddes Company in evaluating the…
A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…
Q: The benchmark portfolio has an asset allocation of 65% stocks, 30% bond and 5% cash. The annual…
A: We can determine the portfolio excess return attributed to security selection using the formula…
Q: project requires an initial investment of $500,000. This project will generate a future cash flow of…
A: NPV means Net Present value.It is a capital budgeting technique used for making investment…
Q: (3) 11.015229%
A: finding the effective annual interest rate (EAR) Lone Watie will be paying, we can follow these…
Q: JJ Industries will pay a regular dividend of $1.60 per share for each of the next four years. At the…
A: A model that helps to evaluate the value of the stock by discounting the dividend earned on the…
Q: what is the payment every year
A: To calculate the payment at the end of each we will use below formulaAnnual payment = PV*rWherePV -…
Q: Required: a. Compute the present value of the tax shield resulting from depreciation. b. Compute the…
A: Present Value (PV) is a financial concept that pertains to the valuation of future cash flows in…
Q: Two friends, Alysha and Betty, are planning for their retirement. Both are 20 years old and plan on…
A: Period of deposit=n=40yearsInterest rate=r=4%Future value required=$1000000Alysha deposit=2 x Betty…
Q: A bond matures in 25 years, but is callable in 11 years at 123. The call premium decreases by 2…
A: 1.Face value of bond is also known as par value.2.Call premium is calculated as follows:-Call…
Q: Cookies 'n Cream, Incorporated, recently issued new securities to finance a new TV show. The project…
A: Debt equity ratio:The debt equity ratio is a financial metric that measures the proportion of a…
Q: What will the ex-dividend price be?
A: A dividend is a payment made to shareholders by a company in the form of cash or stock. As…
Q: The board of Wicker Home Health Care, Inc., is exploring ways to expand the number of shares…
A: GivenEarnings per share is $3.70price per share is $40Dividend per share is $1.44
Q: City Garden Suppliers paid a $2 dividend yesterday. It is expected that the dividend will grow at…
A: Value of Stock = whereD0 = Dividendg= Growth rateKe = Cost of Equity
Q: You are considering buying a 6.5% coupon bond. The bond has a par value of $1,000. The bond was…
A: Bonds are source of investment and finance for companies and investors and bonds are paid coupon…
Q: If the firm uses money market hedge, one year from now, their accounts receivables will fetch them:…
A: The relative worth of two currencies, or the amount of one currency that may be exchanged for one…
Q: What is the PV of an ordinary annuity with 10 payments of $2,700 if the appropriate interest rate is…
A: Present value is the current price of future value at specified rate of interest which is received…
Q: Jefferson Electrical Supply has a cost of equity of 12% and an unlevered cost of capital of 10.5%.…
A: The equity cost levered refers to the cost that is adjusted with the tax rates given. The unlevered…
Q: what is the principal amount to be repaid at the end of ten years? Show your work.
A: Price of the bond is the PV of all future coupons and par value discounted at the YTM. By…
Q: The table below shows the profit after tax and the book value of investment for three projects A, B,…
A: The payback period is a simple and widely used method for evaluating investment projects. It…
Q: 2. If the stated annual rate of interest compounded semi-annually is 12.5% then what is the…
A: The nominal rate of interest is the rate used for computing the value of the amount invested if…
Q: Your parents will retire in 27 years. They currently have $370,000 saved, and they think they will…
A: Retirement income refers to the funds and financial resources that an individual or household…
Q: You paid cash for $1,600 worth of stock a year ago. Today the portfolio is worth $2,626. a. What…
A: First I'm going to list the formula and then solve it in Excel.In margin trading, you purchase a…
Q: The chartering process is especially designed to deal with the reduce the problem. O adverse…
A: Financial health refers to the overall well-being and stability of an individual, organization, or…
Q: KatyDid Clothes has a $110 million (face value) 25-year bond issue selling for 102 percent of par…
A: The debt component here is a bond. To compute the cost of debt we will have to determine the YTM for…
Q: a. Show the effect on the equity accounts and per-share data of a 10% stock dividend.
A: The Dividend Discount Model (DDM) is a valuation method used in finance and investment analysis to…
Q: What is the minimum price at which the convertible should sell? Multiple Choice O $888.84 $815.98
A: Price of a bond is the sum of the present value of coupon payments plus the present value of the par…
Q: Assume a par value of $1,000. Caspian Sea plans to issue a 10.00 year, semi-annual pay bond that has…
A: Price of the bond refers to the present value of the cash flow or the income from the bond and the…
Q: Fingen's 14-year, $1,000 par value bonds pay 9 percent interest annually. The market price of the…
A: Yield to maturity is the rate of return that a bondholder will get if they invest in bond and the…
Q: A company just paid an annual dividend of $0.66. Dividends are expected to grow by 25% in 1 year,…
A: Current price of share is that price which can be paid for purchase of the share. It is also called…
Q: Ava deposited $1,300 in a savings account at her bank. Her account will earn an annual simple…
A: Time has been valuable in all aspects but in terms of finance, time has a money value. The worth of…
Q: You need $15,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an…
A: We need to use loan amortization formula to calculate annual payment of loan.wherePMT = Annual…
Q: Calculate the present value of a loan that could be cleared by payments of $3,250 at the end of…
A: We need to use present value of ordinary annuity formula to calculate the loan amount for given…
Q: Solve the following problems regarding bank loans, bonds, and stocks. Assume an interest rate of 11…
A: Present value is an estimate of the present value of future cash values that may be received at a…
Q: Victoria took out a fully amortizing 30-year mortgage with the initial balance of $196,869. This…
A: Mortgage loans are paid by monthly payments and these monthly payments carry the payment for…
Q: 3.You are given the option of receiving a lump sum of $20,000 now or an annuity of $2000 per year…
A: An annuity is a financial instrument that provides a series of equal payments made at equal…
Q: Consider a four year annual bond paying a 7% coupon, with a yield to maturity of 6.0%. What is the…
A: Bond duration is a measure of a bond's sensitivity to changes in interest rates and it estimates the…
Q: (Related to Checkpoint B.1) (Computing the portfolio expected rate of return) Penny Francis…
A: Expected Return of Portfolio comprising of 3 securities is computed as follows:-Rp = whereRp =…
Q: eed Detailed answer with steps please 30. Considering the following information, what is the NPV if…
A: NPV of refinance can be calculated as the present value of savings from refinance minus cost of…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shell. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320.000. However, the $130 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order? A. Profits will decrease by $1,200. B. Profits will increase by $31,200. C. Profits will increase by $600. D. Profits will increase by $7,200.Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $47 each with expected sales of 3,500 tops annually. By adding the fleece tops, management feels the firm will sell an additional 205 pairs of jeans at $57 a pair and 340 fewer T-shirts at $18 each. The variable cost per unit is $25 on the jeans, $9 on the T-shirts, and $21 on the fleece tops. With the new item, the depreciation expense is $27,000 a year and the fixed costs are $62,000 annually. The tax rate is 21 percent. What is the project's operating cash flow? Multiple Choice $25,815 $12,495 $36,180 $20,980 $31,345
- Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $55 each with expected sales of 3,900 tops annually. By adding the fleece tops, management feels the firm will sell an additional 245 pairs of jeans at $65 a pair and 380 fewer T-shirts at $26 each. The variable cost per unit is $33 on the jeans, $17 on the T-shirts, and $29 on the fleece tops. With the new item, the depreciation expense is $35,000 a year and the fixed costs are $70,000 annually. The tax rate is 21 percent. What is the project's operating cash flow? $28,328 $26,084 $39,596 $30,188 $35,648 Please answer fast i give you upvote.Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $52 each with expected sales of 3,750 tops annually. By adding the fleece tops, management feels the firm will sell an additional 230 pairs of jeans at $62 a pair and 365 fewer T-shirts at $23 each. The variable cost per unit is $30 on the jeans, $14 on the T-shirts, and $26 on the fleece tops. With the new item, the depreciation expense is $32,000 a year and the fixed costs are $67,000 annually. The tax rate is 40 percent. What is the project's operating cash flow? A) $33, 545B) $26, 630C) $28, 655Casual Threads currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $49 each with expected sales of 3,600 tops annually. By adding the fleece tops, management feels the firm will sell an additional 220 pairs of jeans at $59 a pair and 350 fewer T-shirts at $18 each. The variable cost per unit is $36 on the jeans, $9 on the T-shirts, and $21 on the fleece tops. With the new item, the depreciation expense is $27,000 a year and the fixed costs are $62,000 annually. The tax rate is 34 percent. What is the project's operating cash flow? a) $27,789 b) $34,708 c) $36,049 d) $38,419
- Burke's Corner currently selis blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for 547 each with expected sales of 3, 500 tops annually. By adding the fleece tops, management feels the firm will sell an additional 205 pairs of jeans at 557 a pair and 340 fewer T-shirts at $18 each. The variable cost per unit is $25 on the jeans, $9 on the T-shirts, and $21 on the fleece tops. With the new item, the depreciation expense is $27,000 a year and the fixed costs are $62, 000 annually. The tax rate is 21 percent. What is the project's operating cash flow?Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case.The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order?The Outpost, a sole proprietorship currently sells short leather jackets for $369 each. The firm is considering selling long coats also. The long coats would sell for $719 each and the company expects to sell 820 a year. If the company decides to carry the long coat, management feels that the annual sales of the short jacket will decline from 1,120 to 1,040 units. Variable costs on the jacket are $228 and $435 on the long coat. The fixed costs for this project are $23,100, depreciation is $10,400 a year, and the tax rate is 21 percent. What is the projected operating cash flow for this project? Multiple Choice $131,062 $112,212 $131,264 $158,999 $128,749
- yntech makes digital cameras for drones. Their basic digital camera uses $80 in variable costs and requires $1,600 per month in fixed costs. Syntech sells 100 cameras per month. If they process the camera further to enhance its functionality, it will require an additional $50 per unit of variable costs, plus an increase in fixed costs of $1,200 per month. The current price of the camera is $170. The marketing manager is positive that they can sell more and charge a higher price for the improved version. At what price level would the upgraded camera begin to improve operational earnings?Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Curate Furniture approached Jansen about buying 1,200 shelves for bookshelves it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jensen accepts the special order?Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order?A. Profits will decrease by $1,200.B. Profits will increase by $31,200.C. Profits will increase by $600.D. Profits will increase by $7,200.