Please answer them correctly. Here are 2 short problems. Please solve all 2 problems correctly. Make...

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Finance

Please answer them correctly. Here are 2 short problems. Pleasesolve all 2 problems correctly. Make sure the answers are correct.I would really appreciate your effort. Thanks.

1). Sunland, Inc., is considering investing ina new production line for eye drops. Other than investing in theequipment, the company needs to increase its cash and cashequivalents by $10,000, increase the level of inventory by $27,000,increase accounts receivable by $25,000, and increase accountspayable by $5,000 at the beginning of the project. Sunland willrecover these changes in working capital at the end of the project8 years later. Assume the appropriate discount rate is 9 percent.What are the present values of the relevant investment cash flows?(Do not round intermediate calculations. Round answerto 2 decimal places, e.g. 15.25.)

Present Value $__________?

2). Given the soaring price of gasoline, Fordis considering introducing a new production line of gas-electrichybrid sedans. The expected annual unit sales of the hybrid cars is40,000; the price is $25,000 per car. Variable costs of productionare $14,000 per car. The fixed overhead including salary of topexecutives is $80 million per year. However, the introduction ofthe hybrid sedan will decrease Ford’s sales of regular sedans by6,000 cars per year; the regular sedans have a unit price of$20,000, a unit variable cost of $12,000, and fixed costs of$250,000 per year. Depreciation costs of the production plant are$52,000 per year. The marginal tax rate is 40 percent. What is theincremental annual cash flow from operations?

Incremental annual cash flow from operations $____________?

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Question 1 Cash requirement 10000 Increase in inventory 27000 Increase account receivable 25000 Increase account payable 5000 Life of the project 8 years Discount rate 9    See Answer
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Please answer them correctly. Here are 2 short problems. Pleasesolve all 2 problems correctly. Make sure the answers are correct.I would really appreciate your effort. Thanks.1). Sunland, Inc., is considering investing ina new production line for eye drops. Other than investing in theequipment, the company needs to increase its cash and cashequivalents by $10,000, increase the level of inventory by $27,000,increase accounts receivable by $25,000, and increase accountspayable by $5,000 at the beginning of the project. Sunland willrecover these changes in working capital at the end of the project8 years later. Assume the appropriate discount rate is 9 percent.What are the present values of the relevant investment cash flows?(Do not round intermediate calculations. Round answerto 2 decimal places, e.g. 15.25.)Present Value $__________?2). Given the soaring price of gasoline, Fordis considering introducing a new production line of gas-electrichybrid sedans. The expected annual unit sales of the hybrid cars is40,000; the price is $25,000 per car. Variable costs of productionare $14,000 per car. The fixed overhead including salary of topexecutives is $80 million per year. However, the introduction ofthe hybrid sedan will decrease Ford’s sales of regular sedans by6,000 cars per year; the regular sedans have a unit price of$20,000, a unit variable cost of $12,000, and fixed costs of$250,000 per year. Depreciation costs of the production plant are$52,000 per year. The marginal tax rate is 40 percent. What is theincremental annual cash flow from operations?Incremental annual cash flow from operations $____________?

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