Financial Accounting Cash Flow And Profitability Index Homework Help
Best UK USA UAE Australia Canada China Financial Accounting Cash Flow And Profitability Index Homework Help Service Online
You are an external capital budgeting advisor to a highly successful manufacturing firm. You have recently received a proposal for equipment replacement that will presumably lead to more capacity and less cost. The replacement details are given below.
Old Equipment New Equipment
Current book value $ 400,000
Current market value $ 600,000 Acquisition cost $ 1,000,000
Remaining life (yrs.) 10 Life (yrs.) 10
Annual sales $ 300,000 Annual sales $ 450,000
Cash operating expenses $ 120,000 Cash operating expenses $ 150,000
Annual depreciation $ 40,000 Annual depreciation $ 100,000
Accounting salvage value $ 0 Accounting salvage value $ 0
Expected salvage value $ 100,000 Expected salvage value $ 200,000
If the new equipment replaces the old equipment, an additional investment of $80,000 in net working capital will be required. The tax rate is 30% and the required rate of return is 10%.
As you work through the NPV and IRR analysis provided by the company, you discover the following errors:
The initial outlay correctly accounts for incremental investment in new fixed capital and net working capital but after-tax cash proceeds from the sale of old fixed capital are not adjusted.
o Annual operating cashflows are not adjusted for tax and depreciation is not added back.
o Terminal-year after-tax non-operating cashflows do not recapture investment in net working capital. Also, incremental capital gains on salvage value are not taxed.
You realize that you need to do the entire project feasibility report from scratch. You set out to do the following
(a) calculate the initial outlay, year on year after-tax operating cashflows, and terminal-year after-tax non- operating cashflow.
(b) present these cashflows in a tabular format indicating the relevant year in which these cashflows fall. You reckon the usage of a spreadsheet will be very helpful for this exercise.
How it Works?
How it Works?
Step 1:- Want to buy solution for this. Please click on submit your assignment here and then fill all details and please mentioned product code at the end of the case. Product code is extremely important to locate your assignment. You can also mail us by keeping product code as mail subject to email@example.com
Step 2:- As soon as we received your details, we will inform you with through email about quotations of the given assignment. Requesting you to please mention your budget. Also ensure our email firstname.lastname@example.org should not go into your spam folder.
Step 3:- Once you agree with our price, click on pay now and pay the agreed amount and once we received the payment assignment will be delivered before agreed deadline.
Step 4:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.
Our Features for Assignment Help Services
Plagiarism Free Solution
The first and foremost things that we promise to our customer is plagiarism free solution i.e. a complete and unique solution as per customer’s university requirements.
Excellent Customer Care Services
You can feel our responsiveness once you use our service. Our team of excellent and dedicated customer service representatives are always ready to provide best customer care service 24X7 . Just drop a mail to email@example.com and you can receive response in just no time.
Multiple Stage Quality Assurance
We design a unique multiple stage quality assurance team to ensure plagiarism free, original, relevant and as per customer’s requirements. We not only give importance to accurate solutions or writing but also we give equal importance to references style too.
Privacy and Confidentiality
We believe in maintaining complete privacy and confidentiality of all our clients. None of the information furnished to us is shared with anyone else.
We receive requests from clients all over the World. Most of our customers are from USA, UK, Australia, Canada, UAE, Muscat, Oman, Qatar, UAE, New-Zealand, France Germany etc.
- Accounting Homework Help
- Accounting Assignment Help
- Computer Science Homework Help
- Management Homework Help
- Finance Assignment Help
- Online Essay Writing Help
- Strategic management case study help
- Case Study Assignment Help
- Dissertation Writing Help
- Trade finance case study help
- Project Management Assignment Help
- Mechanical Engineering Homework Help
- Online Quiz Help
- Maths homework Help
- Online Exam Help
- Economics Assignment Help
- Economics Homework Help
- English Homework Help
- Macroeconomics Homework Help
- Microeconomics Homework Help
- Statistics Assignment Help
- Australia Taxation Homework Help
- Supply chain management homework help
- Taxation homework help
- USA taxation assignment help
- Advanced accounting homework help online
- Auditing homework writing help
- Human resource management homework help
- Nursing homework help online
- Psychology homework help online
- Sociology homework help online
- Ratio analysis homework help online
- Strategic Management Homework Help Online
- Mba operations management homework help
- Human resource management homework help
- Operations management homework help
(c) find out the NPV, IRR, and Profitability Index for the replacement proposal.
(d) conduct a sensitivity analysis of NPV to the required rate of return falling between the range of 10% to 16% pa (with increments of 1%). Tabulate your results. This step is required because there are some uncertainties at the top management level regarding the appropriate required rate of return to be used due to substantial decrease in risk-free rate over the years.
(e) Following the AIB Assignment Format, prepare an advisory report for the management that includes a theoretical background to the three investment decision criteria you have used for analyses, a comparison among these methodologies, a note on why these criteria are superior to Accounting Rate of Return and Payback Period used by some firms, and finally an analysis of the problem at hand and specific recommendations on the proposal, which integrates all the calculations and tabulations made in (a) to (d) above.
Product Code: ACC546
Looking for Financial Accounting Cash Flow And Profitability Index Homework Help, please submit your details here with product code mentioned above.