Problem 9.05 – Calculating Discounted Payback
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
Find the discounted payback period given the discount rates.
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Find the discounted payback period given the discount rates.
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Calculate the annual depreciation allowances and end-of-the-year book values for industrial equipment classified under MACRS, using the provided MACRS depreciation schedule. Fill out the entire table of numbers.
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Calculate the after-tax cash flow from the sale of a depreciated asset that is used in a project lasting less than its full tax life, considering its initial cost, straight-line depreciation to zero over its tax life, and a projected sale price at the end of the project. Use the relevant tax rate and round your answer to the nearest whole number.
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Find the project’s average accounting return given the installation cost and net incomes.
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Calculate the aftertax salvage value for a MACRS asset used in a project lasting less than its full MACRS tax life, considering its acquisition cost, the MACRS table, and a projected salvage value at the end of the project. Use the relevant tax rate and round your answer to the nearest whole number.
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Find out if the firm should accept the project with the given required return and cash flows.
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Given the required returns, should the firm accept the project?
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Calculate the annual operating cash flow for the introduction of a new product, considering its selling price, expected sales volume, variable costs, depreciation, and fixed costs. Also, consider the effect of the introduction of the new product on the sales volume of the existing model. Determine the OCF for the Music company considering the sale of a new soundboard.
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Find the NPV for the projects with the given discount rates and if they should accept or reject. In addition, find the discount rate at which you are indifferent to accepting or rejecting.
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Calculate OCF, NPV, cash flow from assets, and new NPV for a new project, given the fixed asset investment, annual sales, costs, tax rate, required return, initial net working capital investment, and market value of the fixed asset at the end of the project, when different depreciation methods.
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