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please solve these questions for me. thanks 1. What is Capital Budgeting and what is Incremental Cash flow. By using which rule we can decide
please solve these questions for me. thanks
1. What is Capital Budgeting and what is Incremental Cash flow. By using which rule we can decide that the cash flow is incremental cash flow to project. Write the difference between opportunity cost and sunk cost 2. The project's cost is $10,000. The cash flows are $2,000 per year for the first two years, $4,000 per year for the next two, and $5,000 in the last year. The discount rate is 10 percent, what's the NPV? 3. This project costs $500. What is the payback period for this investment? Show your calculation Year 1 Cash Flow 100 200 500 2 3 4. Consider a project that costs $100 today and pays $110 in one year. What is the return on this investment?" 5. Suppose a project need Net Capital Spending of $ 90,000 by installing new production capacity and the current sales of the company is $ 50,000 it is estimated that the sales will increase 4 times of the current level for next three years. The machine has 3 years of life and depreciation is charged on straight line method. The net change in working capital would be changes in NWC) would be $ 20,000. The Fixed Cost to run the machine would be $ 12,000 for the three years however the variable cost would be 2.5 times the Tax is 30% while the cost of fund is 20% a. What is EBIT, Net Income and Operating Cash Flow (Hint: OCF = EBIT+Der) b Should be undertake this project and Why (Hint NPV) Should we undertake the project if the variable cost is estimated to increase 5 times sales as worse case scenario. d. Calculate the payback period of the project. C. ActivStep by Step Solution
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