Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Q1) a. If project is undertaken, at t = 0 company will need to increase its inventories by $50,000, and its accounts payable will increase by $10,000.  This net operating working capital will be recovered at end of project's life (t = 4).

b. If project is undertaken, company will realize extra $600,000 in sales over each of next four years (t = 1, 2, 3, and 4). Company's operating costs (not including depreciation) will equal $400,000 a year.

c. Company's tax rate is 40%.

d. At t = 4, project's economic life is complete, but it will have salvage value (before-tax) of $50,000.

e. Project's WACC is 10%.

f. Company is very profitable, so any accounting losses on this project can be utilize to decrease company's overall tax burden.

i) Compute project's net present value (NPV)? What does it mean?

ii) Determine the IRR of the project? What does it imply?

iii) If sales figure has plus or minus 5% movement and operating cost has about 6% plus or minus changes, what must be investment decision in best case scenario?

iv) If sales figure has plus or minus 5% movement, and operating cost has about 6% plus or minus changes, what must be investment decision in worst case scenario?

v) If alternative of project offers and overseas investment opportunity for four years with 12% return and presently has exchange rate as 1$USD = .95FOREIGN DOLLAR and dollar depreciates at rate of 5% every year, must CARLOS company select alternative investment?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M916932

Have any Question? 


Related Questions in Accounting Basics

Question 1jian rarimbal and dan are considering setting up

Question 1: Jian, Rarimbal and Dan are considering setting up a company providing 2 hour hot air balloon trips for groups of 10 tourists at a time. The trips will include some food and drink for the tourists. They have d ...

What went wrongfriends bank is seeking to hire a new teller

What Went Wrong? Friend's Bank is seeking to hire a new teller. Darrell has applied for the position. His application states that five years ago, he was convicted for embezzlement as a teller. In the interview, Darrell r ...

1 ahn nguyen a vietnamese joint stock company has net

1. Ahn Nguyen, a Vietnamese Joint Stock Company has net income of 52,000 Vietnamese Dong, () and the following items: Depreciation Expense   16,000 Accounts Receivable Increase                    12,000 Inventory Decreas ...

Assignmentusing a 5 discount rate calculate the net present

Assignment Using a 5% discount rate, calculate the Net Present Value, Payback, Profitability Index, and IRR for each of the investment projects below (note, the inflows are for each year). Based on your calculations rank ...

1 you are the manager of a payroll system your company is

1. You are the manager of a payroll system. Your company is going to replace the legacy payroll system with a more robust, Web-based version. Suggest two approaches that would minimize downtime and interruption to the pa ...

Westerville company reported the following results from

Westerville Company reported the following results from last year % 2013 operations: Sales $ 1,000,000 Variable expenses 300,000 -------------------------------------- Contribution margin 700,000 Fixed expenses 500,000 - ...

Abc company enters into a lease agreement with xyz

ABC company enters into a lease agreement with XYZ corporation for laser tech machines. The lease agreement qualifies as an operating lease. However, there is one thing that stands out. There is a bargain-purchase option ...

Maher inc reported income from continuing operations before

Maher Inc. reported income from continuing operations before taxes during2014 of $790,000. $790,000 Additional transactions occurring in 2014 but not considered in the $790,000 are as follows. 1. The corporation experien ...

1 several years ago courtney borrowed 100000 from the

1) Several years ago, Courtney borrowed $100,000 from the Friendly Local Bank and used it to buy an apartment building. Courtney has not been able to rent any of the apartments in the building and has not made any princi ...

Term paperfirmsteamsanadarko petroleumadams michaelaellis

Term Paper Firms Teams Anadarko Petroleum Adams, Michaela Ellis, Tatiana Jenkins, Jordan Samuel, Brittany Cheniere Energy Amaefule, Frankie Fields, Brittanie Johnson, Brandon Small, Devin Chevron Corporation Brown, Tori ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro