Q: The operating costs of both projects will be 30% of the revenues from year 1-10. Both investment…
A: Internal rate of return refers to the amount of return that is accrued on an investment . It shows…
Q: B&G Co. is planning a project in France. It would lease space for one year in a shopping mall to…
A: Required rate of return = 25% Initial investment = $320,000 (i) Expected pre tax earnings = 650,000…
Q: AsiaChem is a pharmaceutical company in Asia. The company’s research department has identified a…
A: The required rate of return Investors make investments with the motive of earning profit. The least…
Q: ) Statoil sold 1 million barrels of crude oil to the Norwegian petrol station chain, Circle K, today…
A: a) Calculation of forward rate according to IRPT: Forward rate in NOK is lower than the calculated…
Q: Maram & Company Case: Maram & Company are manufacturers of furniture. They are contemplating the…
A: "Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: citrus juice drinks with groves in Indian River County, Florida. Until now, the company has confined…
A: Note: This post contains several questions. The first three - questions a, b, and c have been…
Q: Maram & Company Case: Maram & Company are manufacturers of furniture. They are contemplating the…
A: Variable costs are those costs that are closely associated with the level of production. An increase…
Q: Setia Maju Bhd uses titanium in the production of its specialty drivers. Setia Maju Bhd anticipates…
A: Journal entry refers to the recording of business-related transactions on the basis of the…
Q: Ariel Company for the manutacture of cotton clothes in Turkey sels 40% of its production in Turkey…
A: Net present value refers to the net current worth of a series of cash flows occurring at different…
Q: An energy firm is betting on wind power's long-term viability in Texas and plans to erect what would…
A: IRR is that rate of return which makes value of future cash flows equal to the existing worth.
Q: 1: Mars Technologies is considering setting up a plant in a foreign country. The plant will have an…
A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Maram & Company Case: Maram & Company are manufacturers of furniture. They are contemplating the…
A: SOLUTION-1 VARIABLE COST- IT IS THE EXPENSES THAT CHANGE WITH THE DECREASE AND INCREASE OF THE…
Q: Spot exchange Rate Nok 6.0312/$ 3-month forward rate Nok 6.0186/$ U.S. dollar 3-month interest…
A: Calculation of forward rate according to IRPT: Hence, the forward rate is 6.023NOK per dollar.
Q: Maram & Company Case: Maram & Company are manufacturers of furniture. They are contemplating the…
A: Net present value is the difference between the present value of cash inflows and present value of…
Q: You have taken over the family business, making custom furniture for sale in South Africa and for…
A: The debt-equity ratio is used to measure funds taken from creditors to invest in the business in…
Q: In addition to its Australian business, Big Red Bicycle is considering manufacturing a new range of…
A: As you posted multiple sub parts in questions we are answering first question only kindly repost the…
Q: Selasih Company manufactures aluminium containers for restaurants. The owner of Selasih, Puan…
A: Breakeven sales revenue is that level of sales revenue at which business is fully covering it's…
Q: aram & Company Case: Maram & Company are manufacturers of furniture. They are contemplating the…
A: The unlevered profit after tax is the profit that is remained after paying the tax and the…
Q: st year are 15.4 million if your Belgian subsidiary survives and 1.2 million if the local government…
A: Net present value is defined as the discounted cash flow technique which applies to weight the items…
Q: International energy drink giant Energica Turkey's regional sales manager Hakan Çokbilir investigate…
A: Assuming that the plant in Turkey will be sold for the market price of $ 5 million and hence would…
Q: This plant design, entitled “IIVSDROP: The First Ear Dropper Solution Manufacturing Plant in the…
A: Initial Cost = PHP 550,320,000 Other Cost = PHP 27,000,000 Time Period = 30 Years Rate of return =…
Q: A US firm owns a product plant in the industrial outskirts of Seville in Spain, which it may sell in…
A: Variance measures the difference of actual returns from an investment from its average returns or…
Q: e number of units sold each year) anticipates that 72,000 units can be sold the first year at a…
A: answers: Analysis structure :Since the time frame for the project has not been given, we will use…
Q: You are just one week 'young' in your job as a treasury executive in a leading laptop…
A: In the above-mentioned question, the company is going to acquire the sub-assemblies from the…
Q: (a) The equivalent investment needed if the plant is built in 2015. (b) The equivalent investment…
A: Information Provided: Investment = $200 million Cost of money = 10% per year
Q: GE Marine Systems is planning to supply a Japanese shipbuilder with aero-derivative gas turbines to…
A: Time value Money received today is of more value than receiving the exact value later on.
Q: “IBM is investing $3 billion in a private-public partnership with New York State, Global Foundries,…
A: Solution- (a) Neither party was earning rent since the minimum economic profit needed to induce…
Q: Banana group is one of the largest MNC in the world, with more than 20 years of extensive experience…
A: To Find: NPV,IRR,PI & payback period Comment on project acceptiability
Q: Explain why proponents of LIFO argue that it provides a better match of revenue and expenses. In…
A: Inventory Valuation: An inventory valuation is the financial sum related to the products in the…
Q: ed in the computation and a minimum attractive rate of return is set at 20%. Chapter 4: Products Our…
A: The payback period of investment is calculated as,
Q: onesia is one of the most prestigious companies providing holiday travel packages to tourism…
A: When comparing different projects or in instances where determining a discount rate is problematic,…
Q: All amounts are in $AUD. In order to satisfy the sharp increase in demand KGN is evaluating…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: An International company called Larsen & Toubro (L&T) on 26.3.2019 announced that it had won a…
A: When the firm is not able to finance all the available profitable investment opportunities because…
Q: Do you think the company should make this investment? Why?
A: Calculating the annual cash flow Formula
Q: QUT Entertainment launches a project that trains its trainees to form a new boy band. According to…
A: Given: Cost of training per year : $1.5 million Period of training : Four years Five year discount…
Q: Fomguard LLC of South Korea developed a hightech fiber-optic fencing mesh (FOM) that contains…
A: EUAC estimate the cost per year over the life of the project. It’s depend upon PW, rate and life of…
Q: Leonard, a company that manufactures explosionproof motors, is considering two alternatives for…
A: Present worth analysis is an analysis in which we convert all the cash flows to present worth using…
Q: You are considering producing a new golf ball for sale in China to meet agr~wing demand in the…
A: Given: Price of the land is $100,000. Land price increases each year by 5 percent. Price of…
Q: Maram & Company Case: Maram & Company are manufacturers of furniture. They are contemplating the…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: PT. Nusantara Indonesia is one of the most prestigious companies providing holiday travel packages…
A: Net Present Value is a capital budgeting technique which is used to know the profitability of the…
International energy drink giant Energica Turkey's regional sales manager Hakan Çokbilir investigate the plans for the Middle East and plans to launch in Azerbaijan in 2021. The market price of the Company's plant in Turkey is determined to be $ 5 million. It causes the company to need a capital of $ 20 million in 2021 to shift the investment to Azerbaijan and to establish a new bottling factory and distribution channel. While the fixed expenses required for production, distribution and marketing as of 2021 are $ 3 million per year, 50 million liters of energy drink will be produced in the country at the end of each year. Variable costs arising from production and distribution will be 12 Cent per liter. According to the policy pursued, the expected minimum return rate of the company is accepted as 6%. The income from sales is expected to be 35 cents per liter. Bottling factories are expected to serve almost forever, so all unit costs and sales revenues are expected to remain constant forever. The company will be subject to a 30% tax tranche in accordance with the Azerbaijan tax law and capital investments will be eliminated with equal shares within 5 years. Do you think the company should make this investment? Why?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- International energy drink giant Energica Turkey's regional sales manager Hakan Çokbilir investigate the plans for the Middle East and plans to launch in Azerbaijan in 2021. The market price of the Company's plant in Turkey is determined to be $ 5 million. It causes the company to need a capital of $ 20 million in 2021 for the investment to Azerbaijan and to establish a new bottling factory and distribution channel. While the fixed expenses required for production, distribution and marketing as of 2021 are $ 3 million per year, 50 million liters of energy drink will be produced in the country at the end of each year. Variable costs arising from production and distribution will be 12 Cent per liter. According to the policy pursued, the expected minimum return rate of the company is accepted as 6%. The income from sales is expected to be 35 cents per liter. Bottling factories are expected to serve almost forever, so all unit costs and sales revenues are expected to remain constant…International energy drink giant Energica America's regional sales manager Will Smith investigate the plans for the Middle East and plans to launch in Azerbaijan in 2021. The market price of the Company's plant in America is determined to be $ 5 million. It causes the company to need a capital of $ 20 million in 2021 to shift the investment to Azerbaijan and to establish a new bottling factory and distribution channel. While the fixed expenses required for production, distribution and marketing as of 2021 are $ 3 million per year, 50 million liters of energy drink will be produced in the country at the end of each year. Variable costs arising from production and distribution will be 12 Cent per liter. According to the policy pursued, the expected minimum return rate of the company is accepted as 6%. The income from sales is expected to be 35 cents per liter. Bottling factories are expected to serve almost forever, so all unit costs and sales revenues are expected to remain constant…Pulsar Plc is considering of exporting its products to the Swedish market. It expects to earnan annual accounting profit of £200m from doing so. It has also the option to beginexporting to India, Brasil or South Africa, but it has the production capacity for only one ofthe four possible markets (including Sweden). The expected annual accounting profit forthe above three markets is £250m, £200m, and £150m respectively. On the basis of thisinformation, the economic profit of exporting to Sweden is equal to:a. -£50m.b. £0m.c. £50m.d. £200m.
- Suppose that Kittle Co. is a U.S. based MNC that is considering setting up a subsidiary in Singapore. Kittle would like this subsidiary to produce and sell guitars locally in Singapore, and needs assistance with capital budgeting. The duration of this project is four years, with an initial investment of S$20,000,000 (Singapore dollars). Kittle Co. managers provide you key information regarding the project. 1. The government in Singapore will tax any remitted earnings at a rate of 10.00%. 2. The subsidiary will remit all of it’s after-tax earnings back to the parent. 3. The forecasted exchange rate of the Singapore dollar over the four-year period is $0.50. 4. The salvage value is S$12,000,000, which will be paid by the Singapore government in exchange for ownership of the subsidiary after four years. 5. The required rate of return is 15.00%. Furthermore, no funds can be remitted from the subsidiary to the parent until the subsidiary is sold for the salvage value at…Suppose that Kittle Co. is a U.S. based MNC that is considering setting up a subsidiary in Singapore. Kittle would like this subsidiary to produce and sell guitars locally in Singapore, and needs assistance with capital budgeting. The duration of this project is four years, with an initial investment of S$20,000,000 (Singapore dollars). Kittle Co. managers have provided you with the forecasted demand (number of guitars sold), along with the forecasted price at which each guitar can be sold, over the next four years. e following table with the total revenue from the subsidiary for years 1 through 4, in Singapore dollars (S$) e Year S$ Year 1 60,000 units S$350 S$ Year 2 60,000 units S$350 S$ Year 3 100,000 units S$360 S$ Year 4 100,000 units S$380Suppose that Kittle Co. is a U.S. based MNC that is considering setting up a subsidiary in Singapore. Kittle would like this subsidiary to produce and sell guitars locally in Singapore, and needs assistance with capital budgeting. The duration of this project is four years, with an initial investment of S$20,000,000 (Singapore dollars). Kittle Co. managers provide you key information regarding the project. 1. The government in Singapore will tax any remitted earnings at a rate of 10.00%. 2. The subsidiary will remit all of it’s after-tax earnings back to the parent. 3. The forecasted exchange rate of the Singapore dollar over the four-year period is $0.50. 4. The salvage value is S$12,000,000, which will be paid by the Singapore government in exchange for ownership of the subsidiary after four years. 5. The required rate of return is 15.00%. Furthermore, no funds can be remitted from the subsidiary to the parent until the subsidiary is sold for the salvage value at the…
- The Houston American Cement factory will require an investment of $200 million to construct. Delays beyond the anticipated implementation year of 2012 will require additional money to construct the factory. Assuming that the cost of money is 10% per year, compound interest. Determine the following for the board of directors of the Brazilian company that plans to develop the plant. (a) The equivalent investment needed if the plant is built in 2015. (b) The equivalent investment needed had the plant been constructed in the year 2008.Global Reach, Inc., is considering opening a new warehouse to serve the Southwest region. Darnell Moore, controller for Global Reach, has been reading about the advantages of foreign trade zones. He wonders if locating in one would be of benefit to his company, which imports about 90 percent of its merchandise (e.g., chess sets from the Philippines, jewelry from Thailand, pottery from Mexico, etc.). Darnell estimates that the new warehouse will store imported merchandise costing about 16.78 million per year. Inventory shrinkage at the warehouse (due to breakage and mishandling) is about 8 percent of the total. The average tariff rate on these imports is 5.5 percent. Required: 1. If Global Reach locates the warehouse in a foreign trade zone, how much will be saved in tariffs? Why? (Round your answer to the nearest dollar.) 2. Suppose that, on average, the merchandise stays in a Global Reach warehouse for nine months before shipment to retailers. Carrying cost for Global Reach is 6 percent per year. If Global Reach locates the warehouse in a foreign trade zone, how much will be saved in carrying costs? What will the total tariff-related savings be? (Round your answers to the nearest dollar.) 3. Suppose that the shifting economic situation leads to a new tariff rate of 13 percent, and a new carrying cost of 6.5 percent per year. To combat these increases, Global Reach has instituted a total quality program emphasizing reducing shrinkage. The new shrinkage rate is 7 percent. Given this new information, if Global Reach locates the warehouse in a foreign trade zone, how much will be saved in carrying costs? What will the total tariff-related savings be? (Round your answers to the nearest dollar.)Micheal’s Machinery is a German multinational manufacturing company. Currently, Micheal’s financial planners are considering undertaking a 1-year project in the United States. The project's expected dollar-denominated cash flows consist of an initial investment of $2000 and a cash inflow the following year of $2400. Micheal’s estimates that its risk-adjusted cost of capital is 12%. Currently, 1 U.S. dollar will buy 0.7 Germany. In addition, 1-year risk-free securities in the United States are yielding 6.5%, while similar securities in Germany’s are yielding 4.5%. If this project was instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project? Round your answers to two decimal places. What is the expected forward exchange rate 1 year from now? Round your answer to two decimal places. If Micheal undertakes the project, what is the net present value and rate of return of…
- A bank is considering two alternatives for handling its service calls in the next decade ( treat this as one period). The projected number of service calls is 10,000,000. If the bank sets up its own service call center in the U.S., the fixed cost is estimated to be $2,700,000, and the variable cost is calculated to be 32 cents per call. If the call service is outsourced to a foreign company, the fixed cost would be $240,000, and the unit charge would be 57 cents per call. (a)What is the break-even number of service calls? (b)Would the bank set up its own service call center or outsource call handlings? (Enter 1 for Produce or enter O for Outsource) (C)What would be the dollar amount that the bank can save by choosing the better option? (Cost difference between the two options)Sandrine Machinery is a Swiss multinational manufacturingcompany. Currently, Sandrine’s financial planners are considering undertaking a 1-yearproject in the United States. The project’s expected dollar-denominated cash flows consistof an initial investment of $2,000 and a cash inflow the following year of $2,400. Sandrineestimates that its risk-adjusted cost of capital is 10%. Currently, 1 U.S. dollar will buy0.96 Swiss franc. In addition, 1-year risk-free securities in the United States are yielding3%, while similar securities in Switzerland are yielding 1.50%.a. If this project was instead undertaken by a similar U.S.-based company with the samerisk-adjusted cost of capital, what would be the net present value and rate of returngenerated by this project?b. What is the expected forward exchange rate 1 year from now?c. If Sandrine undertakes the project, what is the net present value and rate of return ofthe project for Sandrine?You are considering producing a new golf ball for sale in China to meet agr~wing demand in the country. This golf ball is less expensive to manufacture compared with a better-known brand, but it meets all requirements set by the United States Golf Association (USGA) for play at any competitive event. Production will require an initial outlay for the purchase of equipment worth $1,500,000. The equipment has a six-year life with an expected salvage value of $100,000. You already own the land on which the project will be located. The land has a current market value of $100,000, and its price is expected to grow by 5% per year. If you decide not to produce the golf balls, you will sell the land. You have also gathered the following information: You expect revenue of $500,000 per year for each year of operation. Your direct cost of producing the golf ball is expected to be 30% of the revenue. The operating cost, including marketing, is another 15% of the revenue. You will need to pay a…