8. Year 0 Year 1 Year 2 Taxable income $9‚100 $10‚250 $15‚300 Marginal tax rate .30 .30 .30 Tax $2‚730 $3‚075 $4‚590 Revenue $13‚000 $16‚250 $23‚400 Expenses (4‚250) (8‚000) (8‚100) Tax cost (2‚730) (3‚075) (4‚590) Net cash flow $6‚020 $5‚175 $10‚710 Discount factor (6%) .943 .890 Present value $6‚020 $4‚880 $9‚532 NPV $20‚432 11. a. Year 0 Year 1 Year 2 Year 3 Year 4 Before-tax cash flow $(500‚000) $52‚500 $47‚500 $35‚500 $530‚500 Tax cost (7‚875)
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Write Up: Mini Case ofChapter 10: The Basics of Capital Budgeting: Evaluation Cash Flows Oct 2‚ 2014 Executive Summary: We heritage $1 million from our grandfather‚ and we just received our master degree in MBA‚ and because we love to be our own boss and‚ we don not have the skills to trade on the market‚ we decided to purchase an established franchise in the fast-food area to make some investments. We chose two franchises: L‚ Lisa’s Soups‚ Salads‚ & Stuff which serves breakfast and lunch;
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Unlevered cost of equity rsu = rf + RPm (bu) = 7.2% + 4%(.839) = 10.56% Operating cash flow using base case projections: 1995 1996 1997 1998 1999 Cash Flow 7‚772 9‚233 9‚807 10‚292 10‚513 Interest Expenses 3‚587 3‚042 2‚324 1‚507 599 Interest * Tax rate 1255.45 1064.7 813.4 527.45 209.65 TV1999 = 10513 + (10513*1.02)/(10.56%-2% ) = $135.81 Million Vunlevered = Net present value of future operating cash flow = $ 110.9 million. The firm cost of debt: Rd = 9% + 1.5% = 10.5% V taxshield=
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Capital Cash Flows: A Simple Approach to Valuing Risky Cash Flows Richard S. Ruback* This paper presents the Capital Cash Flow (CCF) method for valuing risky cash flows. I show that the CCF method is equivalent to discounting Free Cash Flows (FCF) by the weighted average cost of capital. Because the interest tax shields are included in the cash flows‚ the CCF approach is easier to apply whenever debt is forecasted in levels instead of as a percent of total enterprise value. The CCF method retains
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Title: Case study 1-1 Promotion to administrative management. Question 1: What important problem(s) would you anticipate in this case? Response: Mr. Gomez tends to over analyze potential problems. The problems I foresee are Gomez takes extra care to see all invoices are checked twice‚ he monitors for neat desks‚ he takes twenty minutes of his morning to check punctuality‚ and he even tries to make his employees feel he cares by remembering birthdays and anniversaries. It seems to me as
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chapters 1-6‚ Part 1 Chapter One Chapter one introduces the reader to the main character‚ Raphael Fernandez. Raphael‚ a fourteen year old dumpsite boy narrates this part of the story and it entails many interesting ideas about the Behala dumpsite. Raphael and his best friend Gardo spend their days searching the endless amounts of rubbish that cover acres of land. They live knee deep in trash along with many others‚ including children. We find out
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financing. Mini Case R.K Maroon - College Essays - Jerome74300 www.studymode.com/course.../Mini-Case-r-k-Maroon-46043691.html R.K. Maroon is a seed-stage web-oriented entertainment company with important ... venture value with a one-time initial $2‚000‚000 in venture financing. Founders Shares Free Essays 1 - 20 - StudyMode.com www.studymode.com/subjects/founders-shares-page1.html Mini Case R.K Maroon: MINI CASE: R.K.MAROON COMPANY R.K. Maroon is a ... Entreprenurial Finance: MINI CASE 2 ANSWER
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New Product Paper Principles of Marketing Set a price for a new to the world consumer (this means a product that is not on the market) product. Identify a new product you think could be successful on the market and set an introductory price for it. Use the following questions to structure your written analysis. a. What is the product name? Describe the product. The name of my product will be H2O run vehicle. The product is a vehicle‚ car or truck that uses water and
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New Product Launch Marketing Plan‚ Part I New Product Launch Marketing Plan‚ Part I International: Fiat Market Needs and Market Growth “Vehicle shipments in NAFTA totaled 2‚238‚000 units for FY 2013‚ representing a 6% increase over FY 2012. In the U.S.‚ vehicle shipments were 1‚876‚000 (up 7% from FY 2012)‚ in Canada 269‚000 (up 5%) and 93‚000 for Mexico and other.” (Fiat 2013 Full Year Q4 Results‚ 2014) “Fiat forecast that group trading profit this year will rise to between
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of Cash flow * Cash flow is more “direct” as “profit” is highly dependent on accounting conventions and concepts/principles * Cash flow reporting satisfies the needs of all users better since cash flow is more direct with its messages. Some of the interested user parties are: * Creditors -repayment of debts‚ overdue accounts * Management -cash flow reporting provides the type of information which decision should be taken re: relevant costs ( decision based on future cash flow)
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