Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) Zoltec Corp is considering purchase of new manufacturing equipment for the existent line of products. Cost of new equipment is= $85,000. Use of this equipment is expected to decrease manufacturing costs by= $8,000 annually. Machine belongs to asset class 43 with the CCA rate of 30%, and Zoltec expects to sell machine at the ending of its 5-year operating life for= $15,000. The firm expects that new machine will need a $12,000 investment in net working capital. Afterwards, starting with year one, NWC related to project will increase by 5% every year. Required working capital will be recaptured when machine is sold after five years. Zoltec’s marginal tax rate is= 34%, and it uses a 10% cost of capital to estimate projects of this nature.

i) What is ment the PVCCATS?

ii) Compute the NPV of project? Must Zoltec buy machine? (Yes/No)

2) The business risk and optimal capital structure of the firm, tutor made given statement: The major factors which affect business risk are ability to adjust output prices and operating leverage and business risk is uncertainty regarding net income of the firm. For the levered firm 40/60 debt to equity ratio is optimal capital structure that always maximizes value of a firm. Do you agree or disagree with tutor’s statement? Briefly describe.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914876

Have any Question? 


Related Questions in Basic Finance

Estate plan scenariokathi and darrin backgroundkathi and

ESTATE PLAN SCENARIO Kathi and Darrin Background Kathi and Darrin have been married for 50 years and are both in good health. Kathi and Darrin live in a community property state. They have the following children and gran ...

What information explicit and implicit can be derived from

What information (explicit and implicit) can be derived from financial statement analysis? Does the standardization required by GAAP add greater validity to comparisons of financial data between companies and industries? ...

Read and study the following experimental designsfor eacha

Read and study the following experimental designs. For each: a. Identify the number of factors and the number of levels within each of the factors. Identify whether each of the factors is between participants or repeated ...

Abc company claims that the proportion of its employees

ABC Company claims that the proportion of its employees investing in individual investment accounts is higher than national proportion of 50%. A survey of 100 employees in ABC Company indicated that 58 of them have inves ...

1 why do self-report scales use many different items that

1. Why do self-report scales use many different items that assess the same conceptual variable? 2. Consider a measure that shows high internal consistency but low test-retest reliability. What can be concluded about the ...

1 explain the rationale behind the t-test2 write the

1. Explain the rationale behind the t-test. 2. Write the formula for at-test. 3 Distinguish between one-tailed and two-tailed t-tests.

1 what is behavioral research what are its fundamental

1. What is behavioral research? What are its fundamental goals and limitations? Why is learning about behavioral research important? 2. In what ways is behavioral research similar to and different from research in the na ...

Which of the following would be a wash sale explaina you

Which of the following would be a wash sale? Explain. a. You buy a stock at $30. Three weeks later, you sell the stock at $26. Two weeks later, you buy a call on the stock. b. You buy a stock at $40. One month later, you ...

A company tests all new brands of golf balls to ensure that

A company tests all new brands of golf balls to ensure that they meet certain specifications. One test conducted is intended to measure the average distance traveled when the ball is hit by a machine. Suppose the company ...

Explain why an options time value is greatest when the

Explain why an option's time value is greatest when the stock price is near the exercise price and why it nearly disappears when the option is deep-in- or out-of-the-money? Critique the following statement, made by an op ...

  • 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