Finance Assignment
1. What is the technique for evaluating capital projects that tells how long it will take a firm to earn back the money invested in a project?
2. Which capital budgeting technique generates a decision rule and associated metric for choosing projects based on the total discounted value of their cash flows?
3. Which capital budgeting technique generates decision rules and associated metrics for choosing projects based upon the implicit expected geometric average of a project's rate of return?
4. Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are three and three and a half years, respectively.
Calculate the payback and use the payback decision rule to evaluate this project; should it be accepted or rejected? Show your calculations.
5. Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are three and three and a half years, respectively.
Use the IRR decision rule to evaluate this project; should it be accepted or rejected and why?
6. Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the project are three and three and a half years, respectively.
Calculate the NPV and use the NPV technique to evaluate this project; should it be accepted or rejected and why?
7. Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 12 percent, and that the maximum allowable payback and discounted payback statistic for the project are two and two and a half years, respectively.
Calculate the NPV and use the NPV rule to evaluate this project; should it be accepted or rejected and why?
8. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their risk class is 10 percent, and the maximum allowable payback and discounted payback statistic for the projects are two and a half and three and a half years, respectively.
Calculate the payback and use the payback decision rule to evaluate these projects; which one(s) should be accepted or rejected and why?
9. Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. The required rate of return on projects of both of their risk class is 8 percent, and the maximum allowable payback and discounted payback statistic for the projects are two and three years, respectively.
Calculate the NPV and use the NPV decision rule to evaluate these projects; which one(s) should be accepted or rejected and why?
10. Suppose your firm is considering investing in a project with the cash flows shown as follows, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are three and a half four and a half years, respectively. Use the payback decision to evaluate this project; should it be accepted or rejected? What is the payback period?
11. A. What is the firms breakeven point in units?
B. Draw a breakeven chart for this firm.
FC = 20
P = 2
VC = .80
12. If the current account balances are:
Cash = $1,000
Accounts receivable = $500
Accounts payable = $750
Common Equity = 2,000
Fixed Assets = 1,500
Calculate current assets.
13. Based on the financial information below, prepare an income statement and a balance sheet for Webster company for the year ended December 31, 2016. Unless otherwise indicated, assume all information below is either for the year 2016 or as of December 31, 2016.
Accounts receivable......................................... $5,000
Accumulated depreciation................................. $12,000
Cost of goods sold.......................................... $4,000
Income tax expense......................................... $1,000
Cash........................................................... $12,500
Sales........................................................... $25,000
Equipment (gross)........................................... $27,000
Selling, general, & administrative expenses............. $3,000
Common stock (1,000 shares).............................. $7,000
Accounts payable........................................... $19,000
Retained earnings........................................... $13,000
Interest expense............................................. $200
Inventory..................................................... $17,000
Long-term debt.............................................. $10,500
Dividends declared and paid.............................. $600
14. If earnings before taxes (EBT) are $136,000, net sales (all on credit) are $315,000, dividends are 25,000 and net income is 90,000, what is the tax expense?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.
Attachment:- Finance-Questions.rar