You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/66479dcb3322a_48266479dcad829d.jpg)
Transcribed Image Text:
You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office, drops a consultant's report on your desk, and complains, "We owe these consultants $1.6 million for this report, and I am not sure their analysis makes sense. Before we spend the $27 million on new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in millions of dollars): (Click on the following icon in order to copy its contents into a spreadsheet.) Earnings Forecast ($ million) Project Year 1 2 9 10 Sales revenue 33.000 33.000 33.000 33.000 - Cost of goods sold 19.800 19.800 19.800 19.800 = Gross profit 13.200 13.200 13.200 13.200 - Selling, general, and administrative expenses 2.160 2.160 2.160 2.160 - Depreciation 2.700 2.700 2.700 2.700 a. Given the available information, what are the free cash flows in years 0 through 10 that should be used to evaluate the proposed project? The free cash flow for year 0 is $ -40.2 million. (Round to three decimal places and enter a decrease as a negative number.) You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office, drops a consultant's report on your desk, and complains, "We owe these consultants $1.6 million for this report, and I am not sure their analysis makes sense. Before we spend the $27 million on new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in millions of dollars): (Click on the following icon in order to copy its contents into a spreadsheet.) Earnings Forecast ($ million) Project Year 1 2 9 10 Sales revenue 33.000 33.000 33.000 33.000 - Cost of goods sold 19.800 19.800 19.800 19.800 = Gross profit 13.200 13.200 13.200 13.200 - Selling, general, and administrative expenses 2.160 2.160 2.160 2.160 - Depreciation 2.700 2.700 2.700 2.700 a. Given the available information, what are the free cash flows in years 0 through 10 that should be used to evaluate the proposed project? The free cash flow for year 0 is $ -40.2 million. (Round to three decimal places and enter a decrease as a negative number.)
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Company: Macy's, Inc 1. what is the current vision statement of the company? 2. provide a suggested, new and improved vision statement for the company 3. explain what you changed and why 4. what is...
-
If the YTM on the following bonds are identical except, what is the price of bond B? Face value Semiannual coupon Years to maturity Price Bond A $1,000 $45 20 $1,098.96 Bond B $1,000 $35 20 ?
-
Which is the correct order of stages in narrative therapy? Joining, Examining Patterns, Configuring, Re-Storying, Ending Joining, Examining Patterns, Re-Authoring, Moving On Matching, Finding,...
-
Your examination of the records of Wilson Ltd, which was established on 1 March 2015, reveals that the accountant debited the Land, Buildings and Equipment account with the following items (ignore...
-
Birds Eye Treehouses, Inc., a Kentucky company, has determined that a majority of its customers are located in the Pennsylvania area. It therefore is considering using a lockbox system offered by a...
-
You have begun saving for your childs college education. You plan to save $5,000 per year. You want to calculate the amount of money you will have in the college fund after you save for 10 to 15...
-
Cash Flow as a Measure of Income Stone City Weavers reported the following net income for the month of July, computed on a cash basis: Stone City Weavers produces high-quality birch-bark baskets....
-
On July 23, Louie Company sold goods costing $3,000 on account for $4,500. The terms of the sale were n/30. Payment in satisfaction of $3,000 of this amount was received on August 17. Also on August...
-
The client consults you to provide an audit report of MultiTech's financial report and expects all instances of fraud contained in the financial reports to be identified through the...
-
Mike's Radiator Services specializes in the repair and replacement of radiators for passenger vehicles. Variable and fixed costs related to installation activities for the most recent month (January)...
-
Basic of accounting Create the journal entry for transactions below and complete the Financial statement for Mar using the Excel. 1 Capital stock 2 Fixed asset 3 Depreciation 4 Material Erae USA is...
-
Consider a dataset with the following 7 data points: {(3, +1), (2,+1), (-1,-1), (0,-1), (+1,-1), (+2, +1), (+3, +1)} Consider mapping these points to 2 dimensions using the feature vector (x) = (x,...
-
Golf Unlimited carries an inventory of putters and other golf clubs. The sales price of each putter is $144. Company records indicate the following for a particular line of Golf Unlimited's putters:...
-
Peter Company produces mathematical and financial calculators and operates at capacity. Data related to the two products are presented here. (Click the icon to view the data.) Total manufacturing...
-
During a user acceptance test ( UAT ) , a user provides feedback with a suggested minor change to the product. Which type of feedback was provided by the user? Positive feedback Change requests...
-
Problem 4-7 Financial Ratios (LO3) Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in $ millions) Net sales $ 12,800 Cost of goods sold...
-
nts / Unit 5 ~ Function Operations / Quiz 5.1 The domain of y = 5f(5x + 20) +3, where f(x) = -, is X Select one: of O a. x* -4 Ob. x *0 O c. X#3 O d. x # 20
-
Planning: Creating an Audience Profile; Collaboration: Team Projects. Compare the Facebook pages of three companies in the same industry. Analyze the content on all available tabs. What can you...
-
Think about companies that currently have high stock prices. Do these companies sell a product or service or do they offer something else? How is Alibaba.com similar to or different from these...
-
What is Mis?
-
Take a few minutes to browse Alibaba.com and look at some examples of products for sale on the site. What are some of the logistical differences between buying something on Alibaba.com and buying...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App