Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please Show Work Here is all the info I said I would have for you on each of our projects and businesses. Phineas Lab if

image text in transcribed

Please Show Work

Here is all the info I said I would have for you on each of our projects and businesses. Phineas Lab if sold now would have a value of $25M. I estimated that it can be productively used for 4 more years at which time its market value would be down to $10M. Annual Operating and Maintenance costs for the lab are $35M. The lab will produce no revenue at all until year 4; $290M of revenue will be made in year 4. Ferb Lab cannot be reliably run without an upgrade of $90M now, after which time expect Annual Operating and Maintenance costs for the lab to be $25M. Without that upgrade, the lab is essentially worthless. If upgraded then in four years, the lab will be worth $50M. Like Phineas, no revenue is expected until year 4 at which time it will make $170M. Baljeet Tjinder, through his company Tequila Mockingbird, is offering to buy our food production company Jurassic Pork. Their offer is $105M but not until 5 years from now (when he gets out of prison). I went ahead and worked the weekend (not that you would notice) to calculate the profit from year 5 to 15 for your reference. It seems to grow by 10% each year after year 6. Table 1: Profit projection in $M USD for our food production facility, Jurassic Pork 20 15 10 0 6 7 8 9 10 11 12 13 14 15 Carl the Intern was put in charge of the company's' retirement accounts. Also, over the last 8 years have you actually been watching Carl? He lost your coffee money, $150 per year over the last 5 years (1-5), gambling in an Irish pub and then tried to make your money back and lost $350 a year for years 6 - 8. At 9.6% per year compounded monthly, I'm not sure how much that is but I think it's worth firing him. Linda Flynn-Fletcher - I went over the data provided by Linda Flynn-Fletcher in the Financial Analysis Group. I used a real rate of 4.86% interest and 4.9% inflation to decide the following: Between Phineas and Ferb, I compared one against the other using an inflation- adjusted rate and with consideration for opportunity cost to get: Q1 By the end of year 4, Phineas has a future worth of $ MUSD Q2 Ferb has a future worth of $ MUSD. Q3 I choose to keep open. Q4 It has a $ MUSD profit in year 4 after all costs are accounted for, and in comparison to the other lab. MUSD in year Baljeet Tjinder, he offered us $105M in 5 years for Jurassic Pork. Q5. Using a 10% rate, I calculated that Jurassic Pork is worth $ 5. Q6 Adjusted for inflation, the current value of his offer is $ MUSD. Carl the Intern has evidently been messing around for years. Q7. Without consideration for inflation he has lost us $ K USD in PW

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Introduction To Derivatives And Risk Management

Authors: Robert Brooks, Don M Chance, Roberts Brooks

8th Edition

0324601212, 9780324601213

More Books

Students also viewed these Finance questions

Question

differentiate between challenge and hindrance demands;

Answered: 1 week ago

Question

What are the differences between dismissal and discharge?

Answered: 1 week ago