Ranger Corporation is currently selling widgets for $40 at a cost of $20 per unit. Fixed costs are currently $500 and the current production is 100 widgets. What is the Operating Cash Flow at this output level?
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- Please find the Free Cash Flow based on the following information below: Currently, Ljutic A/I Inc. has hired a consulting firm (Oakland Association-OA) to estimate the size of the market and hence expected unit sales for its main product (E-toral application sensor). OA’s work resulted in unit sales estimates of 318,331, 341,342, 368,769, 383,432, and 376,532 units respectively for the next five years conditioned on Ljutic adhering to an average sales price of $568 per unit for the first two years and $387 in years three, four, and five. From that point going forward, growth in unit sales is predicted to be 2.72% indefinitely. The results of an independent outside analysis by a leading market research firm has determined that the company can manufacture its product line at a variable cost per unit expected to be $63.47 growing at 2.23% per year for the first 5 years and 3.17% per year indefinitely thereafter while overall fixed costs are estimated to be $10,482,000 annually for the…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?PRS Corporation uses one of the cash conversion models to manage its cash account. Recently, someone asking how sensitive is the solution for the return point and upper limit to changes in the conversion cost, the variance of daily net cash flow and the daily opportunity cost rate. The values that are currently being used are $50 conversion cost, $2 million daily net cash flow variance and 10% annual opportunity cost. i) Compute the return point using current values and, the upper limit using current values ii) Simultaneously increase each of the three (3) variables values used by 50% and recalculate the return point and upper limit. iii) Discuss the sensitivity of the model to changes in the value of the input variables.
- This problem is useful for testing the ability of financial calculators or excel. Consider the following cash flows. How many different IRRs are there (Hint: search between 20 percent and 70 percent)? When should we take this project?( u can use Excel) Year Cash Flow 0 -$3,024 1 17,172 2 -36,420 3 34,200 4 -12,000Baumol Model and Miller-Orr Model 1. The management of the Book Warehouse Company wishes to apply the Miller-Orr model to manage its cash investment. They have determined that the cost of either investing in or selling marketable securities is $100. By looking at Book Warehouse’s past cash needs, they have determined that the variance of daily cash flows is $20,000. Book Warehouse’s opportunity cost of cash, per day, is estimated to be 0.03%. Based on experience, management has determined that the cash balance should never fall below $10,000. Calculate the lower limit, the return point, and the upper limit based on the Miller-Orr model of cash management.You are analyzing a project and have developed the following estimates: unit sales = 2,150, price per unit = $84, variable cost per unit = $57, fixed costs per year = $13,900. The depreciation is $8,300 a year and the tax rate is 35 percent. What effect would an increase of $1 in the selling price have on the operating cash flow?
- A factory costs $28000. You forecast that it will produce cash inflows of $80000 in year 1, $140000 in year 2, and $220000 in year 3. The discount rate is 12% 1. what is the value of the factory? 2. Is the factory a good investment? Y or NPRS Corporation uses one of the cash conversion models to manage its cash account. Recently, someone asking how sensitive is the solution for the return point and upper limit to changes in the conversion cost, the variance of daily net cash flow and the daily opportunity cost rate. The values that are currently being used are $50 conversion cost, $2 million daily net cashflow variance and 10% annual opportunity cost. i) Compute the return point using current values. ii) Compute the upper limit using current values iii) Simultaneously increase each of the three (3) variables values used by 50% and recalculate the return point and upper limit. iv) Discuss the sensitivity of the model to changes in the value of the input variables. NB. i, ii and iii have been answered already. Please answer question iv.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.)
- PRS Corporation uses one of the cash conversion models to manage its cash account. Recently, someone asking how sensitive is the solution for the return point and upper limit to changes in the conversion cost, the variance of daily net cash flow and the daily opportunity cost rate. The values that are currently being used are $50 conversion cost, $2 million daily net cashflow variance and 10% annual opportunity cost. i) Compute the return point using current values. ii) Compute the upper limit using current values iii) Simultaneously increase each of the three (3) variables values used by 50% and recalculate the return point and upper limit. iv) Discuss the sensitivity of the model to changes in the value of the input variables.Imagineering, Inc., is considering an investment in CAD-CAM compatible design software with the cash flow profile shown in the table below. Imagineering’s MARR is 17 %/year. End of Year Cash Flow (M$) 0 -$12 1 -$1 2 $5 3 $2 4 $5 5 $5 6 $2 7 $5 What is the future worth of this investment?At an output level of 76,000 units, you calculate that the degree of operating leverage is 3.3. The output rises to 81,000 units. What will the percentage change in operating cash flow be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Will the new level of operating leverage be higher or lower?