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Question 3 (40 marks) Stephanie Limited is considering a $20 million ($20,000,000) investment project to support the launch of a new product. Total project economic life is estimated to be five years. The company spent $1 million on marketing research to investigate customers' attitude towards the new product and $2 million removing current production facilities so that Stephanie Ltd can move in the new production facilities for the launch of the new product. The marketing department estimates that 62,000 units will be sold at the end of the first year. Sales units start to grow after the end of the first year of the launch at 15% per year for the next two years until end of the third year and then will remain constant until the end of project economic life as the market matures. The unit selling price is $250 and remains constant. A total of $500,000 cash from total sales at the end of the fifth year will be collected at the end of the sixth year. Total annual variable cost will be 60% of the total sales (revenues). Total annual fixed cost will be $600,000 including $200,000 of allocated cost from headquarter to support this project. The fixed cost does not include the depreciation of the initial investment. $20 million of initial investment can be depreciated using straight-line method for both accounting and tax purposes with $100,000 of salvage value (residual value). The useful life is 5 years. The initial investment will be sold at the end of the investment period for $1,000,000 cash, before tax. Tax rate is 17%. Tax savings from depreciation and allocated cost from headquarter can only be claimed one year later. Tax expense must be paid in the year when it occurs. Cost of capital (required rate of return) of the project is 10%. Cash flow is assumed to take place at the end of each year. Present value tables are provided in the next page if you want to use it. Required: (a) 35 marks Calculate net present value of the project. Should Stephanie Limited take the project on the basis of net present value? (b) Calculate the payback period. 5 marks
Answers
Stephanie Limited is thinking of investing $20,000,000 in a new product launch. In order to create the new manufacturing facilities, the firm has spent $2,000,000. The marketing team predicts that 62,000 products will be sold during the first year, with 15% growth expected over the next two years.
The device will be sold at a constant price of $250. The total project economic life is projected to be five years. Payback time and net present value must both be calculated.The organization spent $1 million on marketing research to investigate customers' attitude toward the new product and $2 million on removing current production facilities. Stephanie Ltd. may move in the new production facilities for the new product's launch as a result of this. The marketing department believes that 62,000 units will be sold by the end of the first year, with sales units increasing by 15% each year until the end of the third year, at which point they will remain stable until the end of the project's economic life as the market matures. The unit selling price is $250 and is constant. At the end of the sixth year, $500,000 cash from total sales at the end of the fifth year will be collected. The total annual variable cost will be 60% of total sales (revenues). The annual fixed cost will be $600,000, including $200,000 of allocated cost from the headquarter to support this project. The fixed cost does not include the depreciation of the initial investment.The cost of capital for the project is 10%. The project's net present value must be calculated. $20 million in initial investment can be depreciated using straight-line depreciation for both accounting and tax purposes, with a residual value of $100,000. The initial investment will be sold for $1,000,000 cash at the end of the investment period before taxes. The tax rate is 17%. Tax savings from depreciation and allocated costs from the headquarter can only be claimed one year later, and tax expense must be paid in the year it is incurred.
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Related Questions
SOLVE THE GRAPH AND THE SUPPLY OR SHORTAGE AND THE PRESSURE OF PRICE
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Answer:
probably cant figure it out
Explanation:
To what extent does the payment of commission motivate workers?
Answers
Answer: Encourages employees to work harder
Explanation:
Highly talented professionals in sales and marketing get more out of commission-based pay since their income relies on how hard they work. The more sales they make, the more generous their compensation will be compared to their less motivated counterparts.
what minimum qualifications should an auditor and a finance manager posses?
Answers
Explanation:
bachelor's degree is preferred subjects like accounting, economics, finance or business administration is frequently the minimum education required for financial managers. However, many employers now search for candidates with a master's degree, preferably in business administration, economics or finance.
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Marcus set a goal to buy a used car in the next few months. He plans to make a $2,500
down payment and has already saved $1,300. If he can save $150 each month for this goal
to buy a car, how long will it take him to save the entire $2,500?
Answers
What companies are currently experiencing supply chain issues or inflation?
Answers
Answer:
Amazon, Kellogs, Nike
Explanation:
HP is also a company being affected by the supply chain issues :)
The inability to function effectively as a result of ongoing stress
1. Employees feel emotionally exhausted
2. Perception of others become calloused
3. Views his or her effectiveness negatively
Answers
Burnout can be defined as the inability to function effectively as a result of ongoing stress. This occurs when individuals are exposed to an excessive amount of stress over an extended period.
Burnout is characterized by three main symptoms:
1. Employees feel emotionally exhausted. This is one of the most common symptoms of burnout. The stress of the job causes individuals to become emotionally depleted, leading to a lack of energy and motivation. This can also lead to feelings of detachment and disengagement from the job.
2. Perception of others becomes calloused. When individuals experience burnout, they often develop a cynical attitude towards their colleagues and superiors. This can lead to a lack of trust and a breakdown in communication, further exacerbating the problem.
3. Views his or her effectiveness negatively. Burnout can also cause individuals to question their own abilities and effectiveness. They may feel as though they are not performing at their best, which can lead to a loss of confidence and further stress.
In conclusion, burnout is a serious issue that can have a significant impact on individuals mental and physical health. It is essential that employers take steps to prevent and manage burnout, such as providing stress-management training and support.
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_______ is an important step of the marketing process because it involves the process of systematically collecting, recording, and analyzing data on what consumers want and need, their consumption habits, trends, and changes in the marketing environment.
a. Marketing strategy
b. Marketing information system
c. Sales forecast
d. Marketing research
Answers
Answer:
Customer relationship management
What are customer needs?
Answers
Answer:
A customer need is a need that motivates a customer to purchase a product or service.
Identify two of Tumi Manufacturers complies with the
Answers
Two of the laws that Tumi manufacturers comply with are
Labor lawsEnvironmental laws.What is corporate social responsibilityThis is the responsibility of an organization to the the area where they operate.
The manufacturers have to comply with the labor and the employment laws that have been set in the country that they operate.
Also one of their corporate responsibilities is to ensure safe practices that are safe and not harmful of our environment.
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1.In a free market society, the answer to the question about how much to produce is determined
by -
A. census data
B. profit projections
C. consumer demand
D. government quotes
Answers
Answer:
C
Explanation:
Supply is relative to demand, and how much you produce will depend on how much you'll need to produce, which is demand.
Discuss the usage of the Chain of Responsibility design pattern
for the above purpose, comparing it with other ways this could have
been achieved, and mentioning the strengths and weaknesses of using
Answers
The Chain of Responsibility design pattern is a behavioral pattern that allows an object to pass a request along a chain of potential handlers until one of them handles the request.
Each handler in the chain has the ability to either handle the request or pass it to the next handler in line. This pattern promotes loose coupling between the sender of a request and its receivers, providing flexibility in adding or modifying handlers without affecting the client code.
The primary purpose of the Chain of Responsibility pattern is to decouple the sender and receiver of a request and provide a way to handle the request dynamically at runtime.
It is commonly used in scenarios where there are multiple objects that can handle a request, but the specific object is not known beforehand or may change dynamically. It allows for the request to traverse the chain until a suitable handler is found or until the end of the chain is reached.
1) Flexibility and extensibility:
The pattern allows for easy addition or removal of handlers without modifying the client code. New handlers can be added to the chain or existing handlers can be reordered, providing flexibility to change the behavior dynamically.
2) Loose coupling:
The sender of the request is decoupled from the specific handlers, as it only needs to know about the first handler in the chain. This promotes code maintainability and reusability by reducing dependencies.
3) Single responsibility principle:
Each handler in the chain has a single responsibility to handle a specific type of request. This promotes a clean and modular design, as each handler focuses on a specific task.
However, there are some potential weaknesses and considerations when using the Chain of Responsibility pattern:
1) Inefficiency:
If the chain is long and the request needs to traverse through the entire chain before being handled, it can introduce some performance overhead. Care should be taken to optimize the chain and avoid unnecessary traversal.
2) Request ambiguity:
If multiple handlers in the chain are capable of handling the same type of request, it may lead to ambiguity or conflicts. Proper design and ordering of the handlers are required to ensure that each request is handled by the intended handler.
3) Dependency on client to initiate the chain:
The client code needs to be aware of the first handler in the chain and initiate the request. This can introduce tight coupling between the client and the chain, limiting the flexibility to change the chain structure.
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blunt county needs $700,000 from property tax to meet its budget. the total value of assessed property in blunt is $110,000,000. what is the tax rate of blunt? (round to the nearest ten thousandth. express the rate in mills.)
Answers
If the total value of assessed property in blunt is $110,000,000, the tax rate for Blunt county is 0.00636 mills.
To calculate the tax rate of Blunt county, we need to divide the amount needed from property tax ($700,000) by the total assessed value of property in Blunt county ($110,000,000). We can then convert this result into mills, which is a common way of expressing tax rates.
Tax rate = ($700,000 / $110,000,000) * 1,000
Tax rate = 0.00636 mills
This means that property owners in Blunt county will be required to pay $0.00636 for every dollar of assessed value of their property. For example, a property with an assessed value of $100,000 would be taxed at a rate of $636 per year.
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Gross billings for merchandise sold by cullumber company to its customers last year amounted to $12720000; sales returns and allowances were $360000, sales discounts were $175300, and freight-out was $139400. net sales last year for cullumber company were
Answers
Answer:
$12,184,700
Explanation:
The computation of net sales last year is shown below:-
Net sales = Sales - Sales return and allowances - Sales discount
= $12,720,000 - $360,000 - $175,300
= $12,184,700
Therefore for determining the net sales we simply applied the above formula and we have not considered the freight out as it is not relevant.
Personal values and work values cannot be related.
If your answer is correct, ill brainly!
Answers
Answer:
The answer is false.
Explanation:
Everybody has personal values, i.e. certain things they find most imperative throughout everyday life. This likewise stretches out to the world of work; your work values to a great extent decide your working style and inclinations.
Additionally, managers will frequently cling to certain center qualities which characterize the organization culture and how the business is lead. Arrangement with them will, no doubt, be a main factor while selecting new representatives.
Monitoring your personal values and those of the organization you're applying to will enable you to decide if the job– and the business in general – is ideal for you, and additionally finding how you can be ideal for them.
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granting a pharmaceutical company a patent for a new medicine will lead to
Answers
Doing such to a pharmaceutical company would lead to option b: (i) and (ii) only:
A product that is priced higher than it would be without the exclusive rights.Incentives for pharmaceutical companies to invest in research and development.When a pharmaceutical company gets a patent, they will become a monopoly for the medicine in question. This will allow them to charge a higher price for the drug seeing as they have no competition.
It will also act as an incentive to other companies to develop more drugs because they will get a chance to benefit alone from the drug.
In conclusion, such a patent would lead to a higher price and act as an incentive.
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Harrimon Industries bonds have 4 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 9%.
What is the yield to maturity at a current market price of
$894? Round your answer to two decimal places.
$1,147? Round your answer to two decimal places
Answers
The yield to maturity for the Harrimon Industries bonds is approximately 4.92% when the current market price is $894, and approximately 6.78% when the current market price is $1,147.
To calculate the yield to maturity (YTM) of the bonds, we can use the formula:
YTM = (Annual Interest + ((Par Value - Current Price) / Years to Maturity)) / ((Par Value + Current Price) / 2)
For the first scenario with a current market price of $894, the annual interest is $1,000 * 9% = $90. Plugging in the values, we get:
YTM = ($90 + (($1,000 - $894) / 4)) / (($1,000 + $894) / 2) = 0.0492 or 4.92%
For the second scenario with a current market price of $1,147, the annual interest is still $90. Plugging in the values, we get:
YTM = ($90 + (($1,000 - $1,147) / 4)) / (($1,000 + $1,147) / 2) = 0.0678 or 6.78%
Therefore, the yield to maturity is approximately 4.92% for a current market price of $894 and approximately 6.78% for a current market price of $1,147.
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counts accounting beta is 1.3 and its tax rate is 25%. if it is financed with 21% debt, what is its unlevered beta? do not round intermediate calculations. round your answer to two decimal places.
Answers
The Unlevered Beta value is 3.81
What does "unlevered beta" mean?Unlevered beta, also known as asset beta, gauges a company's market risk without taking debt into account. By "unlevering" a beta, the risk associated with the assets of the company alone is isolated from the financial implications of leverage. Or how much of the company's risk profile was attributable to its equity.How to calculate unlevered beta?Where:
BL is the firm's beta with leverage =1.3
Tc is the corporate tax rate = 25%
D/E is the company's debt/equity ratio = 21%
Unlevered Beta = (Beta with leverage) /(1+(1-tax rate % )*(debt ratio)
= 1.3 / (1+ (1-0.25) * (0.21)
=1.3/ 1.75 *(0.21)
=1.3 / 0.367
=3.81
The Unlevered Beta value is 3.81
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and insurance companies received he's application for an individual health policy e did not complete all of
Answers
Insurance companies received his application for an individual health policy. He did not complete all of the requirements, so the company denied his application.
What is the purpose of insurance companies?
Insurance companies are entities that provide financial protection to individuals and organizations against potential losses that may arise from unforeseen events such as accidents, illnesses, and natural disasters. The purpose of insurance companies is to offer risk management solutions to their clients by pooling funds from policyholders and using them to cover the expenses of those who experience a covered loss.
Insurance policies typically require policyholders to pay a regular premium in exchange for coverage that will pay out in the event of a covered loss. The amount of the premium is based on the level of risk associated with the policyholder and the likelihood of a loss occurring.
In the case of the student's question, the individual in question applied for an individual health policy but did not complete all of the requirements. As a result, the insurance company denied his application because they deemed him to be too risky to insure. This is because the insurance company needs to ensure that policyholders are able to pay their premiums and are not likely to experience costly medical issues that would require significant payouts.
In conclusion, the purpose of insurance companies is to provide financial protection against potential losses and to manage risk for their clients. Insurance companies pool funds from policyholders and use them to cover the expenses of those who experience a covered loss.
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Firms in oligopolistic industries are "price makers" because such firms ______.
are few in number
increase
pure monopoly
game theory
Answers
Companies in oligopolistic sectors are referred to as "price makers" since they are scarcely few and have considerable control over the price of their goods or services.
In an oligopoly, the market is dominated by a small number of powerful companies. This provides them the authority to control the market price of their goods, either by engaging in strategic pricing behaviour based on game theory or by conspiring to establish prices with other businesses.
Firms in an oligopoly can set prices at a level that optimises their profits, unlike companies in a totally competitive market, where they are "price takers" and must accept the market price established by supply and demand. Yet, price decisions can be complicated and impacted by factors including market share, cost structure, and strategic rivalry because of the strategic interdependence between businesses in an oligopoly.
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If you wait until you're 45 to begin investing, how much money will you need to invest, just for retirement, per
year
Answers
Answer:
It is difficult to give a specific amount that you would need to invest per year if you start investing at age 45 for retirement, as this will depend on a number of factors such as your retirement goals, the amount of money you will need to live on during retirement, the age at which you plan to retire, and your expected investment returns.
In general, it is recommended to start saving and investing for retirement as early as possible, as this will give you more time to grow your money through compound interest. The longer you have to save, the less you will need to save each year to reach your retirement goals. For example, if you start investing at age 25 and plan to retire at age 65, you will have a longer time horizon than someone who starts investing at age 45 and plans to retire at the same age.
To determine how much you should be investing for retirement, you can use a retirement calculator to input your specific retirement goals and assumptions about your investment returns. This will give you an idea of how much you should be saving each year to reach your retirement goals.
It is also a good idea to consult with a financial planner or advisor, who can help you develop a personalized retirement plan based on your individual circumstances and goals.
Explanation:
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Which of the following is NOT a component of a promotional plan?
A). Timeline
B). Goals
C). Samples
D). Budget
Answers
Mike purchases 850 shares of Rose Tinted Glasses (RTG) at a price of$24 each. During the first year of ownership he receives $1.20 per share incash dividends. At the end of the year Mike sells his RTG shares for $23each. The Holding Period Return (HPR) for Mike’s holding is
A.–4.35%
B.–4.17%
C.0.83%
D.0.87%
Answers
Answer:
The Holding Period Return (HPR) for Mike’s holding is C. 0.83%
A surface, such as a prep table, that touches food or from which food could drip or drain onto surfaces that touch food is
called a "food-splash surface."
True
False
Answers
Answer:
False
Explanation:
Food contact surface is what it is called
what are non economic resources?
Answers
Answer:
Non-Economic resources are all those resources that are generally limitless in supply and are not rationed by prices ie (they have no price tags) they are not characteristically traded in markets.Answer:
Non-Economic resources are all those resources that are generally limitless in supply and are not rationed by prices ie (they have no price tags) they are not characteristically traded in markets.
Explanation:
If the market price moves from one point on a demand curve to another point
on the curve, what has happened to total market demand?
O A. The total market demand has decreased.
B. The total market demand has not changed.
C. The total market demand has been adjusted by a change in
supply.
D. The total market demand has increased.
Answers
When the market price shift from one point to another, the total market demand has not changed in the demand curve. Thus, the correct answer is B.
What do you mean by the demand curve?A demand curve represents a correlation between the price of the product and the quantity of the desired product. This is represented with the help of a graph, where the vertical axis keeps the price and the horizontal axis brings the desired quantity.
When the market price shift from one position to another position in the demand curve, it would not affect the total market demand because it has just shifted and not increased the prices.
Therefore, the correct answer is B that market demand has not changed.
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Tommy Richards is paid $20.50 an hour for a regular 40-hour week. He earns time and a half if he works overtime. This week Richards worked his regular 40 hours plus 9 hours of overtime. What is his total pay
Answers
Answer:
$1,094.50
Explanation:
Regular pay is $20.50
Over time pay is $20.50 x 1.5 = $30.75
Tommy earned as follows.
Regular hours : 40 x $20.50 = $820
Overtime hours: 9 x $30.75 =$274.50
Total amount earned
= $820 + $274.50
=$1,094.50
In early 2009, General Electric (GE) had a book value of equity of $105 billion, 10.5 billion shares outstanding, and a market price of $10.80 per share. GE also had cash of $48 billion, and total debt of $524 billion. Three years later, in early 2012, GE had a book value of equity of $116 billion, 10.6 billion shares outstanding with a market price of $17 per share, cash of $84 billion, and total debt of $410 billion. Over this period, what was the change in GE's a. Market capitalization? b. Market-to-book ratio? c. Enterprise value?
Answers
Answer and Explanation:
1. The computation of Market capitalization is shown below:-
Market Capitalization in 2009 = Market Price × Outstanding Shares
= 10.5 × $105
= $1,102.5 billion
Market Capitalization in 2012 = Market Price × Outstanding Shares
= $17 × $10.6
= $180.2 billion
Changes in Market Capitalization = Market Price × Outstanding Shares
= $1,102.5 billion - $180.2 billion
= $922.3
b. The computation of Market-to-book ratio is shown below:-
Market to Book Ratio in 2009 = Market Value of Firm ÷ Book Value of Firm
= $1,102.5 billion ÷ $105 billion
= 10.5
Market to Book Ratio in 2012 = Market Value of Firm ÷ Book Value of Firm
= $180.2 billion ÷ $116 billion
= 1.55
Changes in Market to Book Ratio = Market to Book Ratio in 2009 - Market to Book Ratio in 2012
= 10.5 - 1.55
= 8.95
c. The computation of enterprise value is shown below:-
Book Debt to Equity Ratio in 2009 = Debt ÷ Book Value of Equity
= $524 ÷ $105
= 4.99
Book Debt to Equity Ratio in 2012 = Debt ÷ Book Value of Equity
= $410 ÷ $116
= 3.53
Changes in Book Debt to Equity Ratio = Book Debt to Equity Ratio in 2012 - Book Debt to Equity Ratio in 2009
= 3.53 - 4.99
= -1.46
What is the present value of a growing perpetuity that makes a payment of $100 in the first year, which thereafter grows at 3% per year? Apply a discount rate of 7%
Answers
Answer:
the present value of a growing perpetuity is $2,060
Explanation:
If a cash flow is growing at a constant rate, then we call this a growing perpetuity.
Present Value = PMT ( 1 + g) ÷ (r - g)
where,
g = constant growth rate
= 0.03
r = discount rate
= 0.08
Then,
Present Value = $100 (1,03) ÷ (0.08 - 0.03)
= $2,060
All of the following are eligible investments in a traditional IRA except
A) platinum bullion.
B) limited partnerships.
C) collectibles.
D) shares of a municipal bond fund.
Answers
Answer:
C) collectibles
Explanation:
Alysha has to choose between two investments that have the same cost today. Both investments will ultimately pay $1,200 but at different times, as shown in the table below. If Alysha does not choose one of these investments, she could leave the funds in a bank account paying 3 percent per year.
Which investment should Alysha choose?(Round answer to 2 decimal places, e.g. 125.12. Do not round your intermediate calculations.)
Year Investment A Investment B
1 $0 $200
2 $300 $500
3 $900 $500
Present value of investment A $_____
Present value of investment B $_____
Answers
The present value of investment A is approximately $1,110.93, and the present value of investment B is approximately $1,136.92.
Since investment B has a higher present value, Alysha should choose investment
To determine which investment Alysha should choose, we need to calculate the present value of both investments and compare them. The present value is the current worth of future cash flows, taking into account the time value of money.
Using a discount rate of 3%, we can calculate the present value of each investment as follows:
Present value of investment A:
Year 1: $0 / (1 + 0.03)^1 = $0
Year 2: $300 / (1 + 0.03)^2 ≈ $291.26
Year 3: $900 / (1 + 0.03)^3 ≈ $819.67
Present value of investment B:
Year 1: $200 / (1 + 0.03)^1 ≈ $194.17
Year 2: $500 / (1 + 0.03)^2 ≈ $485.44
Year 3: $500 / (1 + 0.03)^3 ≈ $457.31
Therefore, the present value of investment A is approximately $1,110.93, and the present value of investment B is approximately $1,136.92.
Since investment B has a higher present value, Alysha should choose investment
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