Your firm is contemplating the purchase of a new $540,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $50,000 at the end of that time. You will save $275,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $70,000 (this is a one-time reduction). If the tax rate is 35 percent, what is the IRR for this pr

Mary Graham worked as a real estate agent for Piedmont Properties for 15 years.  Her annual income is approximately $100,000 per year. Mary is considering establishing her own real estate agency. She expects to generate revenues during the first year of $2 Million. Salaries paid to her employees are expected to total $250,000. To begin the business, Mary must borrow$500,000 from her bank at an interest rate of 15%. Equipment will cost Mary $50,000. At the end of one year, the value of this equipment will be $30,000, even though the depreciation expense for tax pursposes is only $5,000 during the first year.    Determine the (pre-tax) accounting profit for this venture Determine the (pre-tax) economic profit for this venture. Which of the costs for this firm are explicit and which are implicit?

Bing Enterprises, Inc., has been considering the purchase of a new manufacturing facility for $290,000. The facility is to be fully depreciated on a straight-line basis over seven years. It is expected to have no resale value after the seven years. Operating revenues from the facility are expected to be $125,000, in nominal terms, at the end of the first year. The revenues are expected to increase at the inflation rate of 2 percent. Production costs at the end of the first year will be $50,000, in nominal terms, and they are expected to increase at 3 percent per year. The real discount rate is 5 percent. The corporate tax rate is 25 percent. Calculate the NPV of the project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV

GBC Group is venturing into a commercial investment property, featuring a leasable building area of 100,000 square feet with an existing tenant paying a gross rent of $50 per square foot and estimated operating expenses at 50%. The lender is proposing a permanent loan with a loan-to-value ratio of 70%。 amortized over 15 years at a 5% interest rate (MPF = 0.007881). Considering a vacancy rate of 5% and a cap rate of 5%, what would be the indicated Breakeven Occupancy Ratio (BOR)? Question 10 options: 133% 115% 88% 106%