The writer is very fast, professional and responded to the review request fast also. Thank you.
A firm is considering introducing a new product. It forecasts incremental an- nual gross profits (sales minus costs) from the product of $123,750, $147,250, and $157,750 for the next three years, respectively.
The project requires the purchase of a factory for $150,000, which would be straight-line depreciated over its 8-year tax life. It is estimated that the factory can be sold for $69,500 at the end of the three-year life of the project. Starting the project requires an initial net working capital investment of $33,750, with further annual increases of $10,500 during the life of the project. All net working capital is fully recoverable at cost when the project terminates. The firm pays tax at a marginal rate of 35% and the appropriate cost of capital for the project is 13.1% per annum.
The projected Free Cash Flow is closest to _________ at the end of Year 2 and closest to _________ at the end of Year 3.
a. $73,025; $223,088 b. $73,025; $176,588
c. $102,275; $252,338 d. $91,775; $163,850 e. $91,775; $241,838
Which of the following is closest to the NPV for this firm of introducing the new product?
a. $78,600 b. $46,459 c. $68,891
d. $147,547 e. $122,797
Show more
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more