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Gaewelyn is considering opening a new business for a long-term care facility. The initial investment for the business is $650,000, which includes constructing the housing

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Gaewelyn is considering opening a new business for a long-term care facility. The initial investment for the business is $650,000, which includes constructing the housing unit and purchasing other assets. For tax purposes, the projected salvage value of all the assets is $106,000. The government requires depreciating the assets using the straight-line method over the business's life of 15 years. Gaewelyn is trying to estimate the net cashflows after tax for this business. She has already figured out that the business will generate an annual after-tax cash inflow of $85,000 from the operation. She now needs your help to estimate the net cash inflow that she will recelve from selling the facility's assets at the end of 15 years. Gaewelyn's required return is 8%. Required: (1) Gaewelyn estimates that, if the economic is booming at the end of the 15 years, she can sell the assets for $144,000. Assuming the tax rate of 30%, what is the net after-tax cashflow Gaewelyn will recelve from selling her assets at the end of 15 yoars? (Please round your answer to the nearest dollar.) $ (2) If Gaewelyn is able to sell her assets for $144,000, as mentioned in (1) above, what is the Internal Rate of Return (IRR) for Gaewelyn's business? (Please round your answer to two decimal points, l.e.. X6 ) (3) Gaewelyn estimates that, if the economy is in recess at the end of the 15 years, she can sell the assets for $76,000. Assuming the tax rate of 30%, what is the net after-tax cashflow Gaewelyn will recelve from selling her assets at the end of i5 years? (Please round your answer to the nearest dollar.) $ (4) If Gaewelyn is able to sell her assets for $76,000, as mentioned in (3) above, what is the Net Present Value (NPV) for Gaewelyn's business? (Please round your answer to two decimal points) $ The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike, Data on sales and expenses for the past quarter follow: "Allocated on the basis of sales dollars. Management is concerned about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines

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