Consider a firm with a contract to sell an asset for $154,000 five years from now. The asset costs $90,000 to produce today. a. Given a relevant discount rate of 13 percent per year, calculate the profit the firm will make on this asset. (A loss should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. At what rate does the firm just break even? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Firm's profit (loss) b. Break-even rate %

Your company has an opportunity to invest in four companies. You are trying todetermine which of these investments make sense. Your company has a 9% cost ofcapital. It will invest in these companies and receive an annual cash dividend eachyear starting one year after the investment. At the end of the term of investment, theinvestment will be scrapped with no salvage value. (a) Determine the internal rate ofreturn for each investment. Round off to the nearest integer discount rate, withdetailed calculation process. (b)Which investments would you recommend yourcompany make?

A firm, whose cost of capital is 8 percent, may acquire equipment for $146,825 and rent it to someone for a period of five years. Note: Although payment of rent is typically considered to be an annuity due, treat it as an ordinary annuity when completing this problem in a spreadsheet or when using present value factors. If the firm charges $38,730 annually to rent the equipment, what are the net present value and the internal rate of return on the investment? Use Appendix D to answer the questions. Use a minus sign to enter negative values, if any. Round your answers for the net present value to the nearest dollar and for the internal rate of return to the nearest whole number. NPV: $   IRR:  % Should the firm acquire the equipment? The firm  acquire the equipment as the net present value is  , and the internal rate of return  the firm's cost of capital. If the equipment has no estimated residual value, what must be the minimum annual rental charge for the firm to earn the required 8…

Modern Artifacts can produce keepsakes that will be sold for $280 each. Nondepreciation fixed costs are $5, 000 per year, and variable costs are $260 per unit. The initial investment of $13,000 will be depreciated straight-line over its useful life of five years to a final value of zero, and the discount rate is 10%. What is the accounting break-even level of sales if the firm pays no taxes? What is the NPV break-even level of sales if the firm pays no taxes? Note: Do not round intermediate calculations. Round your final answer to the nearest whole number. What is the accounting break-even level of sales if the firm's tax rate is 20%? What is the NPV break-even level of sales if the firm's tax rate is 20%? Note: Do not round intermediate calculations. Round your final answer to the nearest whole number. What is the degree of operating leverage for the firm for the NPV break-even points when the tax rate is 0% and when the tax rate is 20%? Note: Round intermediate calculation to the…

A new computer system will require an initial outlay of $19,000, but it will increase the firm’s cash flows by $3,800 a year for each of the next 8 years. How high can the discount rate be before you would reject the project? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places

Suppose you sell a fixed asset for $115,000 when it's book value is $135,000. If your company's marginal tax rate is 21%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?

Your storage firm has been offered $100,000 in one year to store some goods for one year. Assume your costs are $95.700, payable immediately, and the cost of capital is 8.5%. Should you take the contract? The NPV will be $ (Round to the nearest cent.)

Suppose you sell a fixed asset for $125,000 when its book value is $139,000. If your company's marginal tax rate is 30%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? Group of answer choices a. $120,080 b. $129,200 c. $9,800 d. $14,000

A firm is considering renting a trailer at $300/mo. The unit is needed for 5 yr. The leasing company offers a lump sum payment of $24,000 at the end of 5 yr as an alternative payment plan, but is willing to discount this figure. The firm places a value of 10% (effective annual rate) on invested capital. How large should the discount be in order to be acceptable as an equivalent?