Ocean Carriers These questions relate to the Ocean Carriers case in your course packet. You can find the data for this case on the course website in a spreadsheet named: Ocean Carriers Exhibits.xls. This case provides the opportunity to make a capital budgeting decision by using discounted cash flow analysis to make an investment and corporate policy decision. Ocean Carriers is a shipping company evaluating a proposed lease of a ship for a three-year period beginning in 2003. The proposed leasing
Premium Net present value Free cash flow
CHAPTER 5 Net Present Value and Other Investment Criteria Answers to Problem Sets 1. a. A = 3 years‚ B = 2 years‚ C = 3 years b. B c. A‚ B‚ and C d. B and C (NPVB = $3‚378; NPVC = $2‚405) e. True f. It will accept no negative-NPV projects but will turn down some with positive NPVs. A project can have positive NPV if all future cash flows are considered but still do not meet the stated cutoff period. 2. Given the cash flows C0‚ C1‚ . . . ‚ CT
Premium Net present value
Trident University Module 5- SLP FIN501 Dr. Glenn Tenney Net present Value‚ Mergers and acquisitions When brainstorming on the possible ideas of mergers or acquisitions it was easy at first to automatically think similar corporations within the same market either small or big or even in direct competition. Upon researching and reviewing the required readings I realized there are numerous types of mergers and acquisitions that could and should be considered in the terms of better business
Premium Wal-Mart Target Corporation Kmart
In proper capital budgeting analysis we evaluate incremental a. Accounting income. b. Cash flow. c. Earnings. d. Operating profit. Capital Budgeting is a part of: (a)Investment Decision (b) Working Capital Management (c) Marketing Management (d) Capital Structure A project’s average net income divided by its average book value is referred to as the project’s average: A. net present value. B. internal rate of return. C. accounting return. D. profitability index. E. payback
Premium Net present value
Capital and Revenue Expenditures Edwin Bivens XACC- 291 06/08/2014 Capital and Revenue Expenditures: The Differences and Similarities. In order to be able to explain the differences between Capital Expenditure and Revenue Expenditure; I believe it is important to understand what each are: A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment or buildings. Usually the cost is recorded in an account classified as Property‚ Plant and
Premium Generally Accepted Accounting Principles
$2) – (4‚500 × $2) = $1‚000 U 4. Stiner Company’s total materials variance is A) $2‚000 U. B) $2‚000 F. C) $2‚100 U. D) $2‚100 F. = $1‚000 + $1‚000 = $2‚000 U 5. Which of the following will increase the net present value of a project? A) An increase in the initial investment. B) A decrease in annual cash inflows. C) An increase in the discount rate. D) A decrease in the discount rate. 6. Which of the following is true? A) The
Premium Net present value
Capital Budgeting Michele Martin BUS650: Managerial Finance Keith Wade April 01‚ 2013 | | | | |Earned |Possible |Area | | | |
Premium Net present value Investment Rate of return
Capital Expenditure vs Working Capital Capital expenditures are money spent by a company to acquire long-term assets. It is neither for short-term gain nor can be easily translated into cash. These investments are inevitable to ensure the continuing business operations and also for future expansion of the company. Types of Capital Expenditures Typically‚ capital expenditure refers to the expenses that a company incurred to purchase tangible fixed assets and intangible assets. Additionally
Premium Generally Accepted Accounting Principles
1. Given the proposed financing plan‚ describe your approach (qualitatively) to value AirThread. Should Ms. Zhang use WACC‚ APV or some combination thereof? Explain. (2 points) * From the statement of AirThread case‚ we know that American Cable Communication want to raise capital by Leveraged Buyout (LBO) approach. This means ACC will finance money though equity and debt to buy AirThread and pay the debt by the cash flows or assets of AirThread. * In another word‚ it’s a highly levered transaction
Premium Net present value Rate of return Investment
Capital Expenditure Proposal If you were assigned to prepare a capital expenditure budget request to add a retail pharmacy in the hospital‚ which two individuals from your department(s) would you want to have on your team to help you? How would you utilize them to help you? Justify your response and include a minimum of one scholarly reference to support your answer. Respond to at least two of your classmates’ posts. If I were assigned to prepare a capital expenditure budget request in order
Premium Investment Finance Risk