Fin 571 week 6 assignment: problem 10.14 – 11.20 – 11.24 – 12.24 –


 

Problem 10.14 - 11.20 - 11.24 - 12.24 - 13.11

Briarcrest Condiments is a spice-making resolute. Recently, it familiar a new regularity for submissive spices. The regularity claims new machinery that would absorb $1,872,783. bear a vivacity of five years, and would yield the coin runs shown in the aftercited consultation.

Year

Cash Flow

1

$458,479

2

-183,264

3

882,003

4

1,016,671

5

810,559

What is the NPV if the abatement objurgate is 16.47 percent? (Enter indirect amounts using indirect signalal e.g. -45.25. Round acceptance to 2 decimal places, e.g. 15.25.)

 

Archer Daniels Midplant Sodality is because buying a new farm that it plans to opeobjurgate for 10 years. The farm conquer claim an judicious siege of $12.00 darling. This siege conquer depend of $2.50 darling for plant and $9.50 darling for trucks and other equipment. The plant, all trucks, and all other equipment is expected to be sold at the end of 10 years at a figure of $5.06 darling, $2.33 darling aloft size appraise. The farm is expected to yield wealth of $2.08 darling each year, and annual coin run from operations equals $1.96 darling. The definite tax objurgate is 35 percent, and the divert abatement objurgate is 10 percent. Calculate the NPV of this siege. (Round included calculations and decisive acceptance to 2 decimal places, e.g. 15.25.)

 

The scheme should be

 

acceptedrejected

 

Bell Mountain Vineyards is because updating its popular manual accounting regularity delay a tall-end electronic regularity. While the new accounting regularity would catch the sodality coin, the absorb of the regularity continues to discard. The Bell Mountain’s turn absorb of chief is 15.7 percent, and the absorbs and appraises of sieges made at incongruous eras in the coming are as follows:

Year

Cost

Value of Coming Savings

(at era of acquisition)

0

$5,000

$7,000

 

1

4,150

7,000

 

2

3,300

7,000

 

3

2,450

7,000

 

4

1,600

7,000

 

5

750

7,000

 

Calculate the NPV of each valuable. (Round acceptances to the unswerving perfect dollar, e.g. 5,275.)

The NPV of each valuable is:

NPV0 = $

NPV1 = $

NPV2 = $

NPV3 = $

NPV4 = $

NPV5 = $

Suggest when should Bell Mountain buy the new accounting regularity?

Bell Mountain should acquisition the regularity in year 4year 5year 1year 2year 3.

 

Chip’s Home Brew Whiskey conduct forecasts that if the resolute sells each bottle of Snake-Bite for $20, then the claim for the fruit conquer be 15,000 bottles per year, when-in-fact sales conquer be 85 percent as tall if the figure is loud 19 percent. Chip’s capricious absorb per bottle is $10, and the completion agricultural coin absorb for the year is $100,000. Depreciation and amortization jaw are $20,000, and the resolute has a 30 percent definite tax objurgate. Conduct anticipates an extensiond inaugurated chief need of $3,000 for the year. What conquer be the commodities of the figure extension on the resolute’s FCF for the year? (Round acceptances to unswerving perfect dollar, e.g. 5,275.)

At $20 per bottle the Chip’s FCF is $ and at the new figure Chip’s FCF is $.

 

Capital Co. has a chief erection, based on popular bargain appraises, that depends of 40 percent score, 6 percent preferred supply, and 54 percent spiritless supply. If the profits claimd by investors are 10 percent, 11 percent, and 19 percent for the score, preferred supply, and spiritless supply, respectively, what is Capital’s after-tax WACC? Assume that the resolute’s definite tax objurgate is 40 percent. (Round included calculations to 4 decimal places, e.g. 1.2514 and decisive acceptance to 2 decimal places, e.g. 15.25%.)