answer for a thumps up !!
must decide between two my chave projects acho 7,000 and as an expected of 3 years ago throw your heart investment and are subject to the following probity distrito Project A Probability Cash Flows 0.2 56,250 57.000 0.2 $2,750 Project Probability Cash Flows 0.2 30 0.6 57.000 0.2 $18,000 BPC has decided to evaluate the risker project at 11 and the less risky project at 10%. The data has been collected in the Microsoft Excel Online The bow. Open the sprind perform the required analysis to answer the questions below Open spreadsheet a. What is each project's expected annual cash flow? Round your answers to be decimal places Project AS 7000 Project B5 7800 Project B's standard deviation (0) $5,775.61 and its comcent of variation (CV) is 0.74. What are the values of (and (CV)? Round your answer to two decimos 0-s 316 CV- 57756 Fox Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Unit sales Sales price Variable cost per unit Fored operating costs Year 1 4,500 $22.33 $9.45 $32,500 Year 2 5,100 $23.45 $10.85 $33,450 Year 3 Year 4 5,000 5,120 $23.85 $24.45 $11.95 $12.00 $34,950 $34,875 This project will require an investment of $25,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecation as t-0, so it will be fully deprecated at the time of purchase. The equipment will have no salvage value at the end of the project's four-year life. Fox pays a constant tax rate of 25%, and it has a weighted average cost of capita (WACC) of 113. Determine what the project's niet present value (NPV) would be under the new tax law. Determine what the project's net present value (NPV) would be under the new tax law. O $54,677 $38,036 547,545 542,791 Now determine what the project's NPV would be when using straight-line depreciation Using the depreciation method will result in the highest NPV for the project. No other tum would take on this project Fox turns it down. How much should Fox reduce the NPV of this project it discovered that this project O $47,545 O $42,791 Now determine what the project's NPV would be when using straight-line depredation. Using the depreciation method will result in the highest NPV for the project. No other firm would take on this project if Fox turns it down. How much should Fox reduce the NPV of this project if it discovered that this project would reduce one of its division's net after-tax cash flows by $600 for each year of the four-year project? $1,861 O $1,582 O $1,396 O $1,117 Fox spent $1,500 on a marketing study to estimate the number of units that it can sell each year. What should Fox do to take this information into account? O Increase the NPV of the project $1,500 Increase the amount of the initial investment by $1,500, The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost. must decide between two my chave projects acho 7,000 and as an expected of 3 years ago throw your heart investment and are subject to the following probity distrito Project A Probability Cash Flows 0.2 56,250 57.000 0.2 $2,750 Project Probability Cash Flows 0.2 30 0.6 57.000 0.2 $18,000 BPC has decided to evaluate the risker project at 11 and the less risky project at 10%. The data has been collected in the Microsoft Excel Online The bow. Open the sprind perform the required analysis to answer the questions below Open spreadsheet a. What is each project's expected annual cash flow? Round your answers to be decimal places Project AS 7000 Project B5 7800 Project B's standard deviation (0) $5,775.61 and its comcent of variation (CV) is 0.74. What are the values of (and (CV)? Round your answer to two decimos 0-s 316 CV- 57756 Fox Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Unit sales Sales price Variable cost per unit Fored operating costs Year 1 4,500 $22.33 $9.45 $32,500 Year 2 5,100 $23.45 $10.85 $33,450 Year 3 Year 4 5,000 5,120 $23.85 $24.45 $11.95 $12.00 $34,950 $34,875 This project will require an investment of $25,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecation as t-0, so it will be fully deprecated at the time of purchase. The equipment will have no salvage value at the end of the project's four-year life. Fox pays a constant tax rate of 25%, and it has a weighted average cost of capita (WACC) of 113. Determine what the project's niet present value (NPV) would be under the new tax law. Determine what the project's net present value (NPV) would be under the new tax law. O $54,677 $38,036 547,545 542,791 Now determine what the project's NPV would be when using straight-line depreciation Using the depreciation method will result in the highest NPV for the project. No other tum would take on this project Fox turns it down. How much should Fox reduce the NPV of this project it discovered that this project O $47,545 O $42,791 Now determine what the project's NPV would be when using straight-line depredation. Using the depreciation method will result in the highest NPV for the project. No other firm would take on this project if Fox turns it down. How much should Fox reduce the NPV of this project if it discovered that this project would reduce one of its division's net after-tax cash flows by $600 for each year of the four-year project? $1,861 O $1,582 O $1,396 O $1,117 Fox spent $1,500 on a marketing study to estimate the number of units that it can sell each year. What should Fox do to take this information into account? O Increase the NPV of the project $1,500 Increase the amount of the initial investment by $1,500, The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost
