Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Attached are 5 Finance problems. Please provide work and answers in excel spreadsheet to display the formulas used to calculate the each problem. Show work

image text in transcribed

Attached are 5 Finance problems. Please provide work and answers in excel spreadsheet to display the formulas used to calculate the each problem.

image text in transcribed Show work in excel Chapter 5 Problem 14 - Comparing Investment Criteria Wii Brothers, a game manufacturer, has a new idea for an adventure game. It can market the game either as a traditional board game or as an interactive DVD, but not both. Consider the following cash flows of the two mutually exclusive projects for the company. Assume the discount rate for both projects is 10 percent. a. b. c. d. Based on the payback period rule, which project should be chosen? Based on the NPV, which project should be chosen? Based on the IRR, which project should be chosen? Based on the incremental IRR, which project should be chosen? Problem 15 - Profitability Index versus NPV Hanmi Group, a consumer electronics conglomerate, is reviewing its annual budget in wireless technology. It is considering investments in three different technologies to develop wireless communication devices. Consider the following cash flows of the three independent projects available to the company. Assume the discount rate for all projects is 10 percent. Further, the company has only $40 million to invest in new projects this year. a. Based on the profitability index decision rule, rank these investments. b. Based on the NPV, rank these investments. c. Based on your findings in (a) and (b), what would you recommend to the CEO of the company and why? Chapter 6: Problem 3 - Calculating Project NPV Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $1.65 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which it will be worthless. The project is estimated to generate $1.24 million in annual sales, with costs of $485,000. The tax rate is 35 percent and the required return is 12 percent. What is the project's NPV? Problem 19 - Equivalent Annual Cost Bridgton Golf Academy is evaluating new golf practice equipment. The \"Dimple-Max\" equipment costs $64,000, has a three-year life, and costs $7,500 per year to operate. The relevant discount rate is 12 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $7,500 at the end of the project's life. The relevant tax rate is 34 percent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment? Chapter 7: Problem 4 - Financial Break-Even L.J.'s Toys, Inc., just purchased a $375,000 machine to produce toy cars. The machine will be fully depreciated by the straight-line method over its five-year economic life. Each toy sells for $21. The variable cost per toy is $8, and the firm incurs fixed costs of $280,000 each year. The corporate tax rate for the company is 34 percent. The appropriate discount rate is 12 percent. What is the financial break-even point for the project

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson

7th edition

978-0077614041, 9780077446475, 77614046, 007744647X, 77647092, 978-0077647094

Students also viewed these Finance questions

Question

Explain the Pascals Law ?

Answered: 1 week ago

Question

What are the objectives of performance appraisal ?

Answered: 1 week ago

Question

State the uses of job description.

Answered: 1 week ago