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For capital budgeting purposes, which of these is considered a cash inflow? A decrease in the cash balance An increase in accounts receivable An increase

For capital budgeting purposes, which of these is considered a cash inflow?
A decrease in the cash balance
An increase in accounts receivable
An increase in inventory
A decrease in accounts payable
You decide to open a Blank Street Coffee style automated coffee truck downtown. Buying and outfitting the truck will cost $47,000, eligible for bonus depreciation, and you will need $2,000 in working capital. After five years, the truck and equipment will have $10,000 of salvage value.
The lattes will be priced at an average of $5 and cost $2 to make.
You will have a 20% tax rate and a small business loan at 8%.
Over a five year horizon, what is the break-even number of lattes that you will need to sell per year?
Your firm is considering launching a new product offering. To launch the project will cost $0.8 million in upfront costs, eligible for 100% bonus depreciation. Over the next three years you estimate you can sell 300 each year, at a price of $10,000 in year 1, $9,000 in year 2, and $6,000 in year 3. The all in costs to produce the product are $4,400 per unit.
The fixed assets will have a salvage value of $0.4 million in three years time. If your firm's tax rate is 22%, and cost of capital is 18%, what is the project NPV?
You are evaluating a project that would require $120,000 of capital expenditure today. You estimate it will generate $56,000 per year in added revenues and $30,000 added costs per year, for the next five years.
The fixed assets will have $20,000 of salvage value and are eligible for 100% bonus depreciation. You will need to hold additional inventory worth $10,000 while the project is running. Your firm's tax rate is 20%. What is the project IRR?
You are valuing a small competitor firm for a possible acquisition. In year 1, the firm will generate $30 million in EBITDA, and will require $5 million in maintenance capex.
The firm's tax rate is 20% and the maintenance capex is all depreciated in the same year it is spent.
All year 1 values will grow at 2% per year in perpetuity. The discount rate is 15%.
The firm is 100% equity financed and has 4 million shares outstanding. What is the fundamental value per share?
What is the fair value of a call option on the S&P500 index with the following inputs:
Strike price =5300
Index level =5170
Volatility =24%
Treasury bill rate =5%
Maturity =1 month
S&P Index: 5150
1 month S&P Call option with a strike price @5200 is trading at $115.37
Current 1 month T-bill rate: 4.1%
What is the implied volatility of the S&P 500?(meaning, at what level is the VIX?)
ou have just been hired at a small AI software firm firm. Your pay package consists of:
1) A $120,000 salary, and
2)5,000 four-year warrants with a strike price of $50 on the firm's stock.
The stock last traded at $22.10 per share, has a volatility of 40%, and the Treasury rate is 4.4%. What is the total value of your pay package?
If a firm's management decides to play it safe, so the volatility of future cash flows goes down, the value of the firm's shares will go ____ while the value of the firm's bonds will go ____.
You are considering introducing a new line of tests at your genetics firm. You previously did testmarketing and surveys at a cost of $12,000. Based on the results, you estimate that you could sell 2000 of the new tests at a price of $199.
500 of those sales would be to customers who would have bought your old test, which costs $299. The remaining tests would be sold to new customers. Both tests cost $80 per unit to produce, and your firm's tax rate is 20%. What is the after-tax incremental revenue of introducing the new line of tests?
You are evaluating a project that would require $120,000 of capital expenditure today. You estimate it will generate $56,000 per year in added revenues and $30,000 added costs per year, for the next five years.
The fixed assets will have $20,000 of salvage value and are eligible for 100% bonus depreciation. You will need to hold additional inventory worth $10,000 while the project is running. Your firm's tax rate is 20%. What is the project IRR?
You are valuing a small competitor firm for a possible acquisition. In year 1, the firm will generate $30 million in EBITDA, and will require $5 million in maintenance capex.
The firm's tax rate is 20% and the maintenance capex is all depreciated in the same year it is spent.
All year 1 values will grow at 2% per year in perpetuity. The discount rate is 15%.
The firm is 100% equity financed and has 4 million shares outstanding. What is the fundamental value per share?
You are valuing a small competitor firm for a possible acquisition. In year 1, the firm will generate $30 million in EBITDA, and will require $5 million in maintenance capex.
The firm's tax rate is 20% and the maintenance capex is all depreciated in the same year it is spent.
All year 1 values will grow at

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