Question 4 (25 marks) Trevor Car was so impressed with your work on the bonds question that you were promoted after only 1 month with the company You are now Director of Finance and are tasked with evaluating business proposals for clients Your base salary is $194,000 per year The following information was made available to you in order to evaluate a project for the companys new client Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Forecasted Unit Sold 35,000 85,000 95,000 156,000 225,000 199,000 Fixed Costs 410,000 400,000 400,000 400,000 400,000 400,000 This project will run for six years and will require an initial investment of $16,000,000 for new equipment At the end of the six years, this equipment can be sold for $600,000 The initial working capital required will be Inventory of 2,000,000, Accounts Receivable of $1,000,000 and Accounts Payable of $1,000,000 You have contacted CRA and determined that the asset class for this equipment is Class 6 (see table below for CCA rates) You also confirm that the companys tax rate is 35 The company forecasts that they can sell their new products at a price of $225, and that the variable cost of each unit sold is $125 The required rate of return for this project is 32 You have been asked to calculate the NPV and IRR of this project As you have graduated with a BBA from Yorkville, this should not be very difficult for you Trevor Car has promised you another promotion if you are able to solve this Show ALL YOUR WORK You recently got a call from Bill Sing and he tells you that he cannot find a job Bill regrets how he acted during his time at Yorkville University He now understands that cheating and plagiarizing on his exams was not appropriate and hurt him in the long run Using websites like Course Hero and Chegg are not an ethical way for students to conduct themselves Bill has decided to go back to Yorkville University and has pledged to never cheat on an exam again

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Question 4 (25 marks) Trevor Car was so impressed with your work on the bonds question that you were promoted after only 1 month with the company  You are now Director of Finance and are tasked with evaluating business proposals for clients  Your base salary is $194,000 per year  The following information was made available to you in order to evaluate a project for the companys new client  Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Forecasted Unit Sold 35,000 85,000 95,000 156,000 225,000 199,000 Fixed Costs 410,000 400,000 400,000 400,000 400,000 400,000 This project will run for six years and will require an initial investment of $16,000,000 for new equipment  At the end of the six years, this equipment can be sold for $600,000  The initial working capital required will be Inventory of 2,000,000, Accounts Receivable of $1,000,000 and Accounts Payable of $1,000,000  You have contacted CRA and determined that the asset class for this equipment is Class 6 (see table below for CCA rates)  You also confirm that the companys tax rate is 35   The company forecasts that they can sell their new products at a price of $225, and that the variable cost of each unit sold is $125  The required rate of return for this project is 32  You have been asked to calculate the NPV and IRR of this project  As you have graduated with a BBA from Yorkville, this should not be very difficult for you  Trevor Car has promised you another promotion if you are able to solve this  Show ALL YOUR WORK  You recently got a call from Bill Sing and he tells you that he cannot find a job  Bill regrets how he acted during his time at Yorkville University  He now understands that cheating and plagiarizing on his exams was not appropriate and hurt him in the long run  Using websites like Course Hero and Chegg are not an ethical way for students to conduct themselves  Bill has decided to go back to Yorkville University and has pledged to never cheat on an exam again

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Question 4 (25 marks) Trevor Car was so impressed with your work on the bonds question that

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Intermediate Accounting

Question 4 (25 marks) Trevor Car was so impressed with your work on the bonds question that

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Intermediate Accounting

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