Problem 20-48 (book/static) Question Help Met-All Manufacturing manufactures over 20,000 different products made from metal, including building materials, tools, and furniture parts. The manager of the Furniture Parts division has proposed that his division expand into bicycle parts as well. The Furniture Parts division currently generates cash revenues of $4,700,000 and incurs cash costs of $3,600,000, with an investment in assets of $12,090,000. One-quarter of the cash costs are direct labour (Click the icon to view the additional information.) (Click the icon to view the present value of $1 factors.) (Click the icon to view the present value annuity of $1 factors.) Required Click the icon to see the Worked Solution. Requirement 1. Separate the cash flows into four groups: (1) net initial investment cash flows. (2) cash flows from operations. (3) cash flows from terminal disposal of investment and (4) cash flows not relevant to the capital budgeting problem First identifu andd calculate the net initial investment cash flows ice narenthesas r a miniS sinn for cash oitflows Choose from any list o enter any number in the input fields and then click Check Answer 5 parts remaining Check Answer Clear All 4-39 R x ENG 2019-11 DELL Score: 0 of 34 pts 4 of 4 (2 complete) HW Score: 26.1 Problem 20-48 (book/static) Qu Met-All Manufacturing manufactures over 20,000 different products made from metal, including building materials, tools, and furniture manager of the Furniture Parts division has proposed that his division expand into bicycle parts as well. The Furniture Parts division c cash revenues of $4,700,000 and incurs cash costs of $3,600,000, with an investment in assets of $12,090,000 One-quarter of the c direct labour (Click the icon to view th Required (Click the icon to view th tors.) Recired Separate the cash flows into four groups: (1) net initial investment cash flows, (2) cash flows from operations, (3) cash flows from terminal disposal of investment, and (4) cash flows not relevant to the capital budgeting problem. Calculate the NPV of the expansion project and comment on your analysis 1. Click the icon to 2. Requirement 1. Separate the terminal disposal of investme ns, (3) cash Print Done Firct identifir and calcslate the Choose from any list or enter any number in the input fields and then click Check Answer. 5 parts remaining Check Answ Clear All X Additional information fu man re P 00,0 IVi The manager estimates that the expansion of the business will require an investment in working capital of,000. Because the company already has a facility, there would be no additional rent or purchase costs for a building, but the project would generate an additional $420,000 in annual cash overhead. Moreover the manager expects annual materials cash costs for bicycle parts to be $1,700,000, and labour for the bicycle parts to be about the same as the labour cash costs for furniture parts. view rs. view con t The Controller of Met-All, working with various managers, estimates that the expansion would require the purchase of equipment with a $5,000,000 cost and an expected disposal value of $400,000 at the end of its 10-year useful life. Depreciation would occur on a straight-line basis. parate invest (3) The CFO of Met-All determines the firm's cost of capital as 12 %. The CFO's salary is $460,000 per year. Adding another division will not change that. The CEO asks for a report on expected revenue for the project, and is told by the marketing alrulate ist or en Done Print eck An DELL F7 F8 F9 F10 F11 F12 Insert PrntScr & 7 I 4 of 4 (2 complete) HW Score: pts em 20-48 ( e X Additional information Manufacturing man er of the Furniture P wenues of $4,700,0 bour furnit ivisio of the facility, there would be no additional rent or purchase costs for a building, but the project would generate an additional $420,000 in annual cash overhead. Moreover the manager expects annual materials cash costs for bicycle parts to be $1,700,000, and labour for the bicycle parts to be about the same as the labour cash costs for furniture parts. ick the icon to view lick the icon to view rs. ed The Controller of Met-All, working with various managers, estimates that the expansion would require the purchase of equipment with a $5,000.000 cost and an expected disposal value of $400,000 at the end of its 10-year useful life. Depreciation would occur on a straight-line basis Click the icon t The CFO of Met-All determines the firm's cost of capital as 12%. The CFO's salary is $460,000 per year. Adding another division will not change that. The CEO asks for a report on expected revenue for the project, and is told by the marketing department that it might be able to achieve cash revenue of $3,750,000 annually from bicycle parts Met-All Manufacturing has a tax rate of 30% rement 1. Separate al disposal of investr (3) cash flow tentif and calculate e from any list or en Print Done rts eck Answer maining A D DELL F7 F9 F10 F11 F12 Insert PrntScr Delete & Backspace 7 8 0 Y U I O P Problem 20-48 (book/static) Question Help Met-All Manufacturing manufactures over 20,000 different products made from metal, including building materials, tools, and furniture parts. The manager of the Furniture Parts division has proposed that his division expand into bicycle parts as well. The Furniture Parts division currently generates cash revenues of $4,700,000 and incurs cash costs of $3,600,000, with an investment in assets of $12,090,000. One-quarter of the cash costs are direct labour (Click the icon to view the additional information.) (Click the icon to view the present value of $1 factors.) (Click the icon to view the present value annuity of $1 factors.) Required Click the icon to see the Worked Solution. Requirement 1. Separate the cash flows into four groups: (1) net initial investment cash flows. (2) cash flows from operations. (3) cash flows from terminal disposal of investment and (4) cash flows not relevant to the capital budgeting problem First identifu andd calculate the net initial investment cash flows ice narenthesas r a miniS sinn for cash oitflows Choose from any list o enter any number in the input fields and then click Check Answer 5 parts remaining Check Answer Clear All 4-39 R x ENG 2019-11 DELL Score: 0 of 34 pts 4 of 4 (2 complete) HW Score: 26.1 Problem 20-48 (book/static) Qu Met-All Manufacturing manufactures over 20,000 different products made from metal, including building materials, tools, and furniture manager of the Furniture Parts division has proposed that his division expand into bicycle parts as well. The Furniture Parts division c cash revenues of $4,700,000 and incurs cash costs of $3,600,000, with an investment in assets of $12,090,000 One-quarter of the c direct labour (Click the icon to view th Required (Click the icon to view th tors.) Recired Separate the cash flows into four groups: (1) net initial investment cash flows, (2) cash flows from operations, (3) cash flows from terminal disposal of investment, and (4) cash flows not relevant to the capital budgeting problem. Calculate the NPV of the expansion project and comment on your analysis 1. Click the icon to 2. Requirement 1. Separate the terminal disposal of investme ns, (3) cash Print Done Firct identifir and calcslate the Choose from any list or enter any number in the input fields and then click Check Answer. 5 parts remaining Check Answ Clear All X Additional information fu man re P 00,0 IVi The manager estimates that the expansion of the business will require an investment in working capital of,000. Because the company already has a facility, there would be no additional rent or purchase costs for a building, but the project would generate an additional $420,000 in annual cash overhead. Moreover the manager expects annual materials cash costs for bicycle parts to be $1,700,000, and labour for the bicycle parts to be about the same as the labour cash costs for furniture parts. view rs. view con t The Controller of Met-All, working with various managers, estimates that the expansion would require the purchase of equipment with a $5,000,000 cost and an expected disposal value of $400,000 at the end of its 10-year useful life. Depreciation would occur on a straight-line basis. parate invest (3) The CFO of Met-All determines the firm's cost of capital as 12 %. The CFO's salary is $460,000 per year. Adding another division will not change that. The CEO asks for a report on expected revenue for the project, and is told by the marketing alrulate ist or en Done Print eck An DELL F7 F8 F9 F10 F11 F12 Insert PrntScr & 7 I 4 of 4 (2 complete) HW Score: pts em 20-48 ( e X Additional information Manufacturing man er of the Furniture P wenues of $4,700,0 bour furnit ivisio of the facility, there would be no additional rent or purchase costs for a building, but the project would generate an additional $420,000 in annual cash overhead. Moreover the manager expects annual materials cash costs for bicycle parts to be $1,700,000, and labour for the bicycle parts to be about the same as the labour cash costs for furniture parts. ick the icon to view lick the icon to view rs. ed The Controller of Met-All, working with various managers, estimates that the expansion would require the purchase of equipment with a $5,000.000 cost and an expected disposal value of $400,000 at the end of its 10-year useful life. Depreciation would occur on a straight-line basis Click the icon t The CFO of Met-All determines the firm's cost of capital as 12%. The CFO's salary is $460,000 per year. Adding another division will not change that. The CEO asks for a report on expected revenue for the project, and is told by the marketing department that it might be able to achieve cash revenue of $3,750,000 annually from bicycle parts Met-All Manufacturing has a tax rate of 30% rement 1. Separate al disposal of investr (3) cash flow tentif and calculate e from any list or en Print Done rts eck Answer maining A D DELL F7 F9 F10 F11 F12 Insert PrntScr Delete & Backspace 7 8 0 Y U I O P