- mas comoda y soy to wwe te Gerson to buy the XC70 vestiges Mantang Once the XC70 s operation atyrat e capacity expected to get $600 million per year in which we continente Operation The caused by the wilderney 150 ninyol As with ach the cost of poor products produced by these the increased production we who gure cred memory on fontos1.00 min dhe te ding your .Han esources. The power windoto 200 min per you Accounting The XC 700 de preciate in the 10 yew to the machine Themexpects recomes to test 10% soodsama Corporate 4 memes from the purchase of the XD-750 Demine the cash from purch of IX.10 che copriate cost of cow the antion 100 compte the a Weed we will be 1000 metro stansi 120 Wat Photos e. Was even wel wonen? Watterie cost of 10 and he XC 300 which are the contexto the water to the way Whatons 10 moned to the King Denon me pucao XC-750 Ceremonie ich woher) Increment et Co De Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $275 million Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a $50,000 foasibility study to analyze the decision to buy the XC-750, resulting in the following estimates - Marketing Once the XC-750 is operational next year, the extra capacity is expected to generate $1000 million per year in additional sales, which will continue for the 10-year life of the machine Operations. The disruption caused by the installation will decrease sales by $5.00 million this year. As with Billingham's existing products, the cost of goods for the products produced by the XC-750 is expected to be 70% of their sale price. The increased production will also require increased inventory on hand of $100 million during the life of the project, including year 0 Human Resources. The expansion will require additional sales and administrative personnel at a cost of $2.00 milion per year Accounting The XC-750 will be depreciated via the straight line method over the 10-year life of the machine. The firm expects receivables from the new sales to bo 15% of revenues and payables to be 10% of the cost of goods sold Billingham's marginal corporato tax rate is 35% a. Determine the incremental earnings from the purchase of the XC-750 b. Determine the free cash flow from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 100% compute the NPV of the purchase. a. Determine the incremental earnings from the purchase of the XC-750 Calculate the incremental earnings from the purchase of the XC-750 below (with vs without XC2750) (Round to the nearest dollar) Incremental Effects 0 Year Sales Revenues $ 5 $ Cost of Goods Sold SG, and A Expenses Depreciation EBIT $ $ than check Answer ou by the XC-750 is expected to be 70% of the sale price. The increased production will also require increased inventory on hand of $1.00 million during the life of the project, including year 0 Human Resources. The expansion will require additional sales and administrative personnel at a cost of $200 million per year. Accounting: The XC-750 will be depreciated via the straight line method over the 10 year life of the machine. The firm expects receivables from the new sales to L 15% of revenues and payables to be 10% of the cost of goods sold. Billingham's marginal corporate tax rate is 35% a. Determine the incremental earnings from the purchase of the XC-750 b. Determine the free cash flow from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 100%, compute the NPV of the purchase d. While the expected new sales will be $10 00 million per year from the expansion, estimates range from $8.00 million to $12.00 million What is the NPV in the worst case? In the best case? e. What is the break-even level of new sales from the expansion? What is the breakeven level for the cost of goods sold? feBillingham could instead purchase the XC-900 which offers even greater capacity The cost of the XC 900 is $400 million The extra capacity would not be uset in the first two years of operation, but would allow for additional sales in years 3 through 10 What level of additional sales (above the $10.00 million expected for th XC-750) per year in those years would justify purchasing the larger machine? a. Determine the incremental earnings from the purchase of the XC-750 Calculate the incremental earnings from the purchase of the XC-750 below (with vs. without XC7750) (Round to the nearest dollar) Incremental Effects Year S $ Sales Revenues Cost of Goods Sold S., and A Expenses Depreciation 5 5 5 EBIT ale and then click Check Answer You work for Apple Aero w 1 min were all produced out by Google Classes meramente Tunes with the way we can be divide them you think that there will see the big comes to be 51455 million porywing within you will now that will be recibe Des WORSO Act you to 10 min. As the Wome of RD Controle plan to change the prodalom from the end of 512 milion bo 5135dw wie viele they wil 51M2 A 15 and NIVIN cobrand they Cuctos cashews telow to two deca million Years Year Year Voord Year 0.00 5 5 ODOS 000 COM mm Cage Dworcow ENE 0.00 300 0.00 000 00 00 00 0.00 200 000 000 Oy You work for Apple. After toiling away on S9 1 million worth of prototypes, you have finally produced your answer to Google Classes Classes (the name akne is genius) It iTunes with the wink of an eye and apps that can be activated just by looking at them. You think that these will sell for five years until the next big thing comes along for $445.5 million per year along with expenses of $352.7 million. You will need to spend $57 4 milion immediately on additional equipment that will be depreciated using the equipment that has a market value of $10 9 million. As the Glasses are an outcome of the R&D center Apple plans to charge $5 million of the annual costs of the center to from their current level of $1242 million to $1375 million immediately. They will remain at the elevated level until year 4 when they will return to $124.2 million Apple's dis and determine the NPV of this project (Note Assume that the opportunwly cost must be after tax and the equipment is put into use in your 1) Year 3 Year 4 Year 5 Year 6 $ S S $ $ $ S 0.00 0:00 000 0.00 S S S Calculate the free cash flows below. (Round to two decimal places) ($ million) Year 0 Year 1 Year 2 Sales s 0.00 $ $ Cost of Goods Sold 0.00 Gross Profit S 000 $ $ Annual Charge 0.00 0.00 0.00 Depreciation EDIT $ $ $ Incremental Earnings S S Depreciation - Incremental Working Capital 000 000 000 0.00 Capital investment 000 0.00 - Opportunity cost Incremental Free Casti flow $ S 5 S 0.00 0.00 0.00 000 0100 0.00 0.00 0.00 0.00 000 15 $ $ d your answer to Google Glasses Glasses (the name alone is genius) Glasses will instantly transport the wearer into the world as Apple wants him to experience that these will sell for five years until the next big thing comes along (or until users are unable to interact with actual human beings) Revenues are projected to be 7 immediately on additional equipment that will be depreciated using the 5-year MACRS schedule Additionally, you will use some fully depreciated existing enter, Apple plans to charge $5 million of the annual costs of the center to the Glasses product for four years. Finally, Apple's working capital levels will increase ated level until year 4, when they will return to $1242 million. Apple's discount rate for this project is 144% and its tax rate is 21% Calculate the tree cash flows and the equipment is put into use in year 1.) Year 5 Year 6 $ 5 S 5 3 0.00 0.00 $ $ 50 30 000 600 0.00 00 0.00 Activate Windows Billingham Packaging is considering expanding its production capacity by purchasing a new machine, several months and will partially disrupt production. The firm has just completed a $50,000 feasibility Marketing Once the XC-750 is operational next year, the extra capacity is expected to generate $10 Operations. The disruption caused by the installation will decrease sales by $5.00 million this year. expected to be 70% of their sale price. The increased production will also require increased inventory on hand of $1.00 million during the life of t Human Resources. The expansion will require additional sales and administrative personnel at a co Accounting. The XC-750 will be depreciated via the straight-line method over the 10-year life of the 10% of the cost of goods sold. Billingham's marginal corporate tax rate is 35% a. Determine the incremental earnings from the purchase of the XC-750. b. Determine the free cash flow from the purchase of the XC-750. c. If the appropriate cost of capital for the expansion is 100%, compute the NPV of the purchase d. While the expected new sales will be $10.00 million per year from the expansion, estimates rang e. What is the break-even level of new sales from the expansion? What is the breakeven level for a. Determine the incremental earnings from the purchase of the XC-750 Calculate the incremental earnings from the purchase of the XC-750 below (with vs without XC? purchasing a new machine, the XC-750. The cost of the XC-750 is $2.75 million. Unfortunately, installing this machine will take pleted a $50,000 feasibility study to analyze the decision to buy the XC-750, resulting in the following estimates is expected to generate $10.00 million per year in additional sales, which will continue for the 10-year life of the machine by $5.00 million this year. As with Billingham's existing products, the cost of goods for the products produced by the XC-750 is million during the life of the project, including year 0. histrative personnel at a cost of $2.00 million per year. over the 10-year life of the machine. The firm expects receivables from the new sales to be 15% of revenues and payables to be 5% NPV of the purchase pansion, estimates range from $8.00 million to $12.00 million. What is the NPV in the worst case? In the best case? me breakeven level for the cost of goods sold? with vs without XC2750) (Round to the nearest dollar) lax rate is 35% a. Determine the incremental earnings from the purchase of the XC-750 b. Determine the free cash flow from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 10.0%, compute the NPV of the purchase d. While the expected new sales will be $10.00 million per year from the expansion, estimates ra e. What is the break-even level of new sales from the expansion? What is the breakeven level fo f. Billingham could instead purchase the XC-900, which offers even greater capacity. The cost of would allow for additional sales in years 3 through 10. What level of additional sales (above the 9 a. Determine the incremental earnings from the purchase of the XC-750 Calculate the incremental earnings from the purchase of the XC-750 below (with vs without XC? Incremental Effects Year 0 Sales Revenues $ Cost of Goods Sold $ Sand A Ensiases er earnings from the purchase of the XC-750. b. Determine the free cash flow from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 10.0%, compute the NPV of the d. While the expected new sales will be $10.00 million per year from the expansion, es e. What is the break-even level of new sales from the expansion? What is the breakeve f. Billingham could instead purchase the XC-900, which offers even greater capacity. T would allow for additional sales in years 3 through 10. What level of additional sales (al Year 0 $ Sales Revenues Cost of Goods Sold SG, and A Expenses Depreciation EBIT $ $ Taxes at 35% $ - mas comoda y soy to wwe te Gerson to buy the XC70 vestiges Mantang Once the XC70 s operation atyrat e capacity expected to get $600 million per year in which we continente Operation The caused by the wilderney 150 ninyol As with ach the cost of poor products produced by these the increased production we who gure cred memory on fontos1.00 min dhe te ding your .Han esources. The power windoto 200 min per you Accounting The XC 700 de preciate in the 10 yew to the machine Themexpects recomes to test 10% soodsama Corporate 4 memes from the purchase of the XD-750 Demine the cash from purch of IX.10 che copriate cost of cow the antion 100 compte the a Weed we will be 1000 metro stansi 120 Wat Photos e. Was even wel wonen? Watterie cost of 10 and he XC 300 which are the contexto the water to the way Whatons 10 moned to the King Denon me pucao XC-750 Ceremonie ich woher) Increment et Co De Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $275 million Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a $50,000 foasibility study to analyze the decision to buy the XC-750, resulting in the following estimates - Marketing Once the XC-750 is operational next year, the extra capacity is expected to generate $1000 million per year in additional sales, which will continue for the 10-year life of the machine Operations. The disruption caused by the installation will decrease sales by $5.00 million this year. As with Billingham's existing products, the cost of goods for the products produced by the XC-750 is expected to be 70% of their sale price. The increased production will also require increased inventory on hand of $100 million during the life of the project, including year 0 Human Resources. The expansion will require additional sales and administrative personnel at a cost of $2.00 milion per year Accounting The XC-750 will be depreciated via the straight line method over the 10-year life of the machine. The firm expects receivables from the new sales to bo 15% of revenues and payables to be 10% of the cost of goods sold Billingham's marginal corporato tax rate is 35% a. Determine the incremental earnings from the purchase of the XC-750 b. Determine the free cash flow from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 100% compute the NPV of the purchase. a. Determine the incremental earnings from the purchase of the XC-750 Calculate the incremental earnings from the purchase of the XC-750 below (with vs without XC2750) (Round to the nearest dollar) Incremental Effects 0 Year Sales Revenues $ 5 $ Cost of Goods Sold SG, and A Expenses Depreciation EBIT $ $ than check Answer ou by the XC-750 is expected to be 70% of the sale price. The increased production will also require increased inventory on hand of $1.00 million during the life of the project, including year 0 Human Resources. The expansion will require additional sales and administrative personnel at a cost of $200 million per year. Accounting: The XC-750 will be depreciated via the straight line method over the 10 year life of the machine. The firm expects receivables from the new sales to L 15% of revenues and payables to be 10% of the cost of goods sold. Billingham's marginal corporate tax rate is 35% a. Determine the incremental earnings from the purchase of the XC-750 b. Determine the free cash flow from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 100%, compute the NPV of the purchase d. While the expected new sales will be $10 00 million per year from the expansion, estimates range from $8.00 million to $12.00 million What is the NPV in the worst case? In the best case? e. What is the break-even level of new sales from the expansion? What is the breakeven level for the cost of goods sold? feBillingham could instead purchase the XC-900 which offers even greater capacity The cost of the XC 900 is $400 million The extra capacity would not be uset in the first two years of operation, but would allow for additional sales in years 3 through 10 What level of additional sales (above the $10.00 million expected for th XC-750) per year in those years would justify purchasing the larger machine? a. Determine the incremental earnings from the purchase of the XC-750 Calculate the incremental earnings from the purchase of the XC-750 below (with vs. without XC7750) (Round to the nearest dollar) Incremental Effects Year S $ Sales Revenues Cost of Goods Sold S., and A Expenses Depreciation 5 5 5 EBIT ale and then click Check Answer You work for Apple Aero w 1 min were all produced out by Google Classes meramente Tunes with the way we can be divide them you think that there will see the big comes to be 51455 million porywing within you will now that will be recibe Des WORSO Act you to 10 min. As the Wome of RD Controle plan to change the prodalom from the end of 512 milion bo 5135dw wie viele they wil 51M2 A 15 and NIVIN cobrand they Cuctos cashews telow to two deca million Years Year Year Voord Year 0.00 5 5 ODOS 000 COM mm Cage Dworcow ENE 0.00 300 0.00 000 00 00 00 0.00 200 000 000 Oy You work for Apple. After toiling away on S9 1 million worth of prototypes, you have finally produced your answer to Google Classes Classes (the name akne is genius) It iTunes with the wink of an eye and apps that can be activated just by looking at them. You think that these will sell for five years until the next big thing comes along for $445.5 million per year along with expenses of $352.7 million. You will need to spend $57 4 milion immediately on additional equipment that will be depreciated using the equipment that has a market value of $10 9 million. As the Glasses are an outcome of the R&D center Apple plans to charge $5 million of the annual costs of the center to from their current level of $1242 million to $1375 million immediately. They will remain at the elevated level until year 4 when they will return to $124.2 million Apple's dis and determine the NPV of this project (Note Assume that the opportunwly cost must be after tax and the equipment is put into use in your 1) Year 3 Year 4 Year 5 Year 6 $ S S $ $ $ S 0.00 0:00 000 0.00 S S S Calculate the free cash flows below. (Round to two decimal places) ($ million) Year 0 Year 1 Year 2 Sales s 0.00 $ $ Cost of Goods Sold 0.00 Gross Profit S 000 $ $ Annual Charge 0.00 0.00 0.00 Depreciation EDIT $ $ $ Incremental Earnings S S Depreciation - Incremental Working Capital 000 000 000 0.00 Capital investment 000 0.00 - Opportunity cost Incremental Free Casti flow $ S 5 S 0.00 0.00 0.00 000 0100 0.00 0.00 0.00 0.00 000 15 $ $ d your answer to Google Glasses Glasses (the name alone is genius) Glasses will instantly transport the wearer into the world as Apple wants him to experience that these will sell for five years until the next big thing comes along (or until users are unable to interact with actual human beings) Revenues are projected to be 7 immediately on additional equipment that will be depreciated using the 5-year MACRS schedule Additionally, you will use some fully depreciated existing enter, Apple plans to charge $5 million of the annual costs of the center to the Glasses product for four years. Finally, Apple's working capital levels will increase ated level until year 4, when they will return to $1242 million. Apple's discount rate for this project is 144% and its tax rate is 21% Calculate the tree cash flows and the equipment is put into use in year 1.) Year 5 Year 6 $ 5 S 5 3 0.00 0.00 $ $ 50 30 000 600 0.00 00 0.00 Activate Windows Billingham Packaging is considering expanding its production capacity by purchasing a new machine, several months and will partially disrupt production. The firm has just completed a $50,000 feasibility Marketing Once the XC-750 is operational next year, the extra capacity is expected to generate $10 Operations. The disruption caused by the installation will decrease sales by $5.00 million this year. expected to be 70% of their sale price. The increased production will also require increased inventory on hand of $1.00 million during the life of t Human Resources. The expansion will require additional sales and administrative personnel at a co Accounting. The XC-750 will be depreciated via the straight-line method over the 10-year life of the 10% of the cost of goods sold. Billingham's marginal corporate tax rate is 35% a. Determine the incremental earnings from the purchase of the XC-750. b. Determine the free cash flow from the purchase of the XC-750. c. If the appropriate cost of capital for the expansion is 100%, compute the NPV of the purchase d. While the expected new sales will be $10.00 million per year from the expansion, estimates rang e. What is the break-even level of new sales from the expansion? What is the breakeven level for a. Determine the incremental earnings from the purchase of the XC-750 Calculate the incremental earnings from the purchase of the XC-750 below (with vs without XC? purchasing a new machine, the XC-750. The cost of the XC-750 is $2.75 million. Unfortunately, installing this machine will take pleted a $50,000 feasibility study to analyze the decision to buy the XC-750, resulting in the following estimates is expected to generate $10.00 million per year in additional sales, which will continue for the 10-year life of the machine by $5.00 million this year. As with Billingham's existing products, the cost of goods for the products produced by the XC-750 is million during the life of the project, including year 0. histrative personnel at a cost of $2.00 million per year. over the 10-year life of the machine. The firm expects receivables from the new sales to be 15% of revenues and payables to be 5% NPV of the purchase pansion, estimates range from $8.00 million to $12.00 million. What is the NPV in the worst case? In the best case? me breakeven level for the cost of goods sold? with vs without XC2750) (Round to the nearest dollar) lax rate is 35% a. Determine the incremental earnings from the purchase of the XC-750 b. Determine the free cash flow from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 10.0%, compute the NPV of the purchase d. While the expected new sales will be $10.00 million per year from the expansion, estimates ra e. What is the break-even level of new sales from the expansion? What is the breakeven level fo f. Billingham could instead purchase the XC-900, which offers even greater capacity. The cost of would allow for additional sales in years 3 through 10. What level of additional sales (above the 9 a. Determine the incremental earnings from the purchase of the XC-750 Calculate the incremental earnings from the purchase of the XC-750 below (with vs without XC? Incremental Effects Year 0 Sales Revenues $ Cost of Goods Sold $ Sand A Ensiases er earnings from the purchase of the XC-750. b. Determine the free cash flow from the purchase of the XC-750 c. If the appropriate cost of capital for the expansion is 10.0%, compute the NPV of the d. While the expected new sales will be $10.00 million per year from the expansion, es e. What is the break-even level of new sales from the expansion? What is the breakeve f. Billingham could instead purchase the XC-900, which offers even greater capacity. T would allow for additional sales in years 3 through 10. What level of additional sales (al Year 0 $ Sales Revenues Cost of Goods Sold SG, and A Expenses Depreciation EBIT $ $ Taxes at 35% $