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need these today, ill give a like for sure! Use the data provided for Starbucks and their proposed project to answer this question. What is
need these today, ill give a like for sure!
Use the data provided for Starbucks and their proposed project to answer this question. What is the EBIT in year 4 for this project? O A. $305,809 OB. $337,805 OC. $387,100 OD. $430,000 I. This is for questions 1-19 Starbucks is discussing a new project amongst their management team. They are considering a project where they will sell to the public the coffee makers that they use in their stores. This way customers can brew their Starbucks coffees at home at not have to worry about going inside the restaurant and being exposed to other people. The chief marketing officer (CMO) estimates that they will sell 7,000 units a year for 5 years at a price of $150 each. The chief operations officer (COO) estimates that the variable costs to build these will be 60% of revenue. The COO says the company will need to buy an assembly line to make these. The assembly line costs $450,000 and has a shipping cost of $20,000. The COO adds that they will need to purchase an additional $40,000 in inventory and accounts payable will increase by $7,000. Once the project ends, they will no longer need additional inventory and will pay the accounts payable balance. The chief financial officer (CFO) The CFO says to use the MACRS 3 year class for depreciation. (These are the same rates as used in the slides.) He estimates that the assembly line will have a salvage value of $20,000. He notes that Starbuck's tax rate is 21% and that the normal WACC is 9.5%. The CMO notes that they have done an extensive marketing survey and many Starbucks customers are scared to go to a store in today's environment and would be happy to purchase their own equipment. This research is already paid for and cost $75,000 I E Page 1 of 2 621 words 1109 AM Use the data provided for Starbuck's and their proposed project to answer this question. What are the tax expenses in year 2 of this project? A. $37,921 OB. $43,785 OC. $49,563 OD.$52,000 QUESTION 9 Use the data provided for Starbucks and their proposed project to answer this question. What are the operating cash flows in year 3? (This is the EBIT (1-T) + Dep. Ex) O A. $297,650 OB. $322,678 OC. $346,605 OD. $540,230 Use the data provided for Starbucks and their proposed project to answer this question. What is the after tax salvage value? O A. $48,800 OB. $45,800 C. $33,000 OD. $15,800 QUESTION 11 Use the data provided for Starbuck's and their proposed project to answer this question. What are the terminal cash flows? O A. $48,800 B. $45,800 C. $33,000 OD. $15,800 Should the $75,000 spent on marketing research be included in this business case? If so, where? O A. YES- this is an operating cost O B. YES- this is a revenue reduction OC. YES- this is an outflow in year 0 OD.NO - this is a sunk cost QUESTION 13 Use the data provided for Starbuck's and their proposed project to answer this question. What is the NPV of this project? O A. -$503,000 OB. $884,884.30 OC. $1,033,120 OD. $2,068,572 Use the data provided for Starbuck's and their proposed project to answer this question. What is the IRR of this project? O A. 33.67% OB. 54.63% OC. 57.29% OD. 66.57% QUESTION 15 This project does not have normal cash flows and we cannot use the IRR to evaluate it. True False QUESTION 16 Use the data provided for Starbucks and their proposed project to answer this question. What is the MIRR of this project? Use the WACC as both the reinvestment rate and the finance rate. A. 11.9% OB. 31.3% OC. 34.14% OD.65.22% Why is the MIRR so much lower than the IRR? O A. Because this is a very risky project OB. The IRR assumes reinvestment at the IRR rate which is much greater than the WACC. OC. The MIRR is always less than the IRR. OD. The MIRR assumes that there is only one sign change in the cash flows. QUESTION 18 Use the data provided for Starbuck's and their proposed project to answer this question. What is the payback period for this project? O A..37 years B. 1.37 years OC. 2.37 years OD.3.37 years Use the data provided for Starbuck's and their proposed project to answer this question. What is the discounted payback period for this project? O A..54 years B. 1.37 years O C. 1.54 years D.2.54 years Step by Step Solution
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