5,6

K 7000393 sechon L la hember 31.10N Arratsalle Nilox payable Anak 1 Long-term loan Thes 51.800.000 52.000.000 52.700,000 Totalsts Recep Totality S20000 Total abilities and equity Income Statement for December 31, 2018 $1,600.000 1279,720 5320,20 Sade 3600COO openly with 3279720 EBIT 320 S3022000 Tanes (409 Netcome Dividends ST300 SIOSO 1246 Suppose that in 2019 se crew by to over 2018 sales and that 2019 dividends will increase to $112.000. The firm believes that m o nicreleboaring abilities should grow at the same rates sales. However, it wants to reduce the motio of rating costs to sales to 8896 and increase total debt ratio to 30% Use an interest rate of 13%, and w e that 2019's forecasted interest-bearing debt will be 60 notes payable and remaining will be long-term loans Forecast the financial statements for Garlington Technologies Inc. for 2019 (10) 6) You must analyze a potential new product-a caulicing Compound that Cory Materials R&D people developed for use in the residential construction industry. R D has informed you that costs for the new product were $30.000 and that those costs were incurred and expensed for tax purposes last year. Cory's marketing manager thinks the company can sell 115,000 tubes per year for 3 years at a price of $3.25 each after which the product will be obsolete. The required equipment would cost $150.000. plus another 525.000 for shipping and installation. Current assets (receivables and inventories) would increase by S35000while current liabilities (accounts payable and accruals) would rise by $15,000, Variable costs would be 60% of sales revenues, fixed costs (exclusive of depreciation would be $70.000 per year, and fixed assets would be depreciated under MACRS with applicable depreciation rates of 1396, 4596, 15% and 7% in years 1 to 4 respectively. When production ceases after 3 years, the equipment should have a market value of $9.500 Cory's tax rate is 409, and it uses a 10%. WACC for average-risk projects a) Find the required Year investment and the project's annual net cash flows. b) Calculate the project's NPV, IRR, MIRR, and payback. Should the project be undertaken? c) Ir the new project would reduce sales from Cory's other projects by S15.000 every year, how would this affect the project's NPV? What would this NPV be? (10-6-3) 14.827 7) Cory is analyzing two mutually exclusive machines that will upgrade its manufacturing plant. Management will evaluate them at the firm's 10% WACC Machine X has a life of 4 years, while Machine Y has a life of 2 years. The cost of each machine is 560,000; however, Machine X provides after tax cash flows of $25.000 per year for 4 years and Machine Y provides after-tax cash flows of $42.000 per year 2 years. The manufacturing plant is very successful, so the machines will be repurchased at the end of each machine's useful life. a) Using the replacement chain approach, what is the NPV of the better machine? b) Using the EAA approach, what is the EAA of the better machine? 2 do W 25000 foto har Riaz 17000393 sechon L W hether nies and 5 00,000 Solo 360o cao, c 3311720 EB11 320 2019 S302,000 Tes(401 Net income 1296 Suppose that in 2010 Increase by 10% OVE 2018 sales and that 019 dividends WWW CC SUB.00. The firm believes that arts and non-imresiebeam show grow at the sales. However, it is to reduce the ratio of operating costs to sales to increase total de 10 e Jon Use an interest rate of 13%, and w more than 2019's foreca vied werest-bearing die will be payable and remaining will be long-term lowns. Vorecast the financial statements for Garmon Technologies (10) Inc. for 2019 6) You must analyze a potential new product a caulking compound that Cory Materials R&D people developed for use in the residential construction industry. He has informed you that costs for the product were $30,000 and that those costs were incred and exposed for tax purposes as year Cory marketing manager thinks the company can sell 115,000 tubes per year for 3 years at a price of after which the product will be obsolete. The required wiperent world cost $150,000, plus another Store for shipping and installation Current issets (receivables and inventories) would increase by $350 current liabilities (accounts payable and actuals) would rise by $15,000, Variable costs would be sales revenues, fixed costs (exclusive of depreciation) would be $70,000 per year, and fixed it would be depreciated under MACRS with applicable depreciation wies of 33%, 454, 1596 and 796 in years 1 to 4 respectively. When production ceases after 3 years, the equipment should have a market value of $9.500 Cory's tax rate is 40%, and it uses a 10% WACC for average risk projects a) Find the required Year investment and the project's annual net cash flows. b) Calculate the project's NPV.TRR, MIRR, and payback. Should the project be undertaken? c) If the new project would reduce sales from Cory's other projects by $15.000 every year, how would this affect the project's NPV? What would this NPV be? (10-6-3) 74827 7) Cory is analyzing two mutually exclusive machines that will perade its manufacturing plant. Management will evaluate them at the firm's 10% WACC Machine X has a life of 4 years, while Machine Y has a life of 2 years. The cost of each machine is $60,000: however, Machine X provides after-tax cath flows of $25,000 per year for 4 years and Machine Y provides after-tax cash flows of $42.000 per year 2 years. The manufacturing plant is very successful, so the machines will be repurchased at the end of each machine's useful life. a) Using the replacement chain approach, what is the NPV of the better machine? b) Using the EAA approach, what is the EAA of the better machine? 2600D 9000 We do K 7000393 sechon L la hember 31.10N Arratsalle Nilox payable Anak 1 Long-term loan Thes 51.800.000 52.000.000 52.700,000 Totalsts Recep Totality S20000 Total abilities and equity Income Statement for December 31, 2018 $1,600.000 1279,720 5320,20 Sade 3600COO openly with 3279720 EBIT 320 S3022000 Tanes (409 Netcome Dividends ST300 SIOSO 1246 Suppose that in 2019 se crew by to over 2018 sales and that 2019 dividends will increase to $112.000. The firm believes that m o nicreleboaring abilities should grow at the same rates sales. However, it wants to reduce the motio of rating costs to sales to 8896 and increase total debt ratio to 30% Use an interest rate of 13%, and w e that 2019's forecasted interest-bearing debt will be 60 notes payable and remaining will be long-term loans Forecast the financial statements for Garlington Technologies Inc. for 2019 (10) 6) You must analyze a potential new product-a caulicing Compound that Cory Materials R&D people developed for use in the residential construction industry. R D has informed you that costs for the new product were $30.000 and that those costs were incurred and expensed for tax purposes last year. Cory's marketing manager thinks the company can sell 115,000 tubes per year for 3 years at a price of $3.25 each after which the product will be obsolete. The required equipment would cost $150.000. plus another 525.000 for shipping and installation. Current assets (receivables and inventories) would increase by S35000while current liabilities (accounts payable and accruals) would rise by $15,000, Variable costs would be 60% of sales revenues, fixed costs (exclusive of depreciation would be $70.000 per year, and fixed assets would be depreciated under MACRS with applicable depreciation rates of 1396, 4596, 15% and 7% in years 1 to 4 respectively. When production ceases after 3 years, the equipment should have a market value of $9.500 Cory's tax rate is 409, and it uses a 10%. WACC for average-risk projects a) Find the required Year investment and the project's annual net cash flows. b) Calculate the project's NPV, IRR, MIRR, and payback. Should the project be undertaken? c) Ir the new project would reduce sales from Cory's other projects by S15.000 every year, how would this affect the project's NPV? What would this NPV be? (10-6-3) 14.827 7) Cory is analyzing two mutually exclusive machines that will upgrade its manufacturing plant. Management will evaluate them at the firm's 10% WACC Machine X has a life of 4 years, while Machine Y has a life of 2 years. The cost of each machine is 560,000; however, Machine X provides after tax cash flows of $25.000 per year for 4 years and Machine Y provides after-tax cash flows of $42.000 per year 2 years. The manufacturing plant is very successful, so the machines will be repurchased at the end of each machine's useful life. a) Using the replacement chain approach, what is the NPV of the better machine? b) Using the EAA approach, what is the EAA of the better machine? 2 do W 25000 foto har Riaz 17000393 sechon L W hether nies and 5 00,000 Solo 360o cao, c 3311720 EB11 320 2019 S302,000 Tes(401 Net income 1296 Suppose that in 2010 Increase by 10% OVE 2018 sales and that 019 dividends WWW CC SUB.00. The firm believes that arts and non-imresiebeam show grow at the sales. However, it is to reduce the ratio of operating costs to sales to increase total de 10 e Jon Use an interest rate of 13%, and w more than 2019's foreca vied werest-bearing die will be payable and remaining will be long-term lowns. Vorecast the financial statements for Garmon Technologies (10) Inc. for 2019 6) You must analyze a potential new product a caulking compound that Cory Materials R&D people developed for use in the residential construction industry. He has informed you that costs for the product were $30,000 and that those costs were incred and exposed for tax purposes as year Cory marketing manager thinks the company can sell 115,000 tubes per year for 3 years at a price of after which the product will be obsolete. The required wiperent world cost $150,000, plus another Store for shipping and installation Current issets (receivables and inventories) would increase by $350 current liabilities (accounts payable and actuals) would rise by $15,000, Variable costs would be sales revenues, fixed costs (exclusive of depreciation) would be $70,000 per year, and fixed it would be depreciated under MACRS with applicable depreciation wies of 33%, 454, 1596 and 796 in years 1 to 4 respectively. When production ceases after 3 years, the equipment should have a market value of $9.500 Cory's tax rate is 40%, and it uses a 10% WACC for average risk projects a) Find the required Year investment and the project's annual net cash flows. b) Calculate the project's NPV.TRR, MIRR, and payback. Should the project be undertaken? c) If the new project would reduce sales from Cory's other projects by $15.000 every year, how would this affect the project's NPV? What would this NPV be? (10-6-3) 74827 7) Cory is analyzing two mutually exclusive machines that will perade its manufacturing plant. Management will evaluate them at the firm's 10% WACC Machine X has a life of 4 years, while Machine Y has a life of 2 years. The cost of each machine is $60,000: however, Machine X provides after-tax cath flows of $25,000 per year for 4 years and Machine Y provides after-tax cash flows of $42.000 per year 2 years. The manufacturing plant is very successful, so the machines will be repurchased at the end of each machine's useful life. a) Using the replacement chain approach, what is the NPV of the better machine? b) Using the EAA approach, what is the EAA of the better machine? 2600D 9000 We do