Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.

Get a Professional Answer

Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.

100% Satisfaction Guarantee

Rate the answer you receive.

Ask Linda_us Your Own Question

Linda_us, Finance, Accounts & Homework Tutor

Category: Homework

Satisfied Customers: 7291

Experience: Post Graduate Diploma in Management (MBA)

19873544

Type Your Homework Question Here...

Linda_us is online now

MGT 325 Module 6 Spreadsheet Exam Part A COMPREHENSIVE

This answer was rated:

★★★★★

MGT 325 Module 6 Spreadsheet Exam Part A

COMPREHENSIVE CHAPTER 12 & 13 PROBLEMS MONARCH CORPORATION IS GOING TO START A NEW PRODUCT LINE OF PRODUCTS IN A WHOLE NEW MARKET. THE DATA FOR ANALYSIS IS PRESENTED BELOW:

COST OF THE EQUIPMENT NEEDED $194,000 FIVE YEAR PROPERTY FOR TAX DEPRECIATION NEW WORKING CAPITAL NEEDS $50,000 WILL BE RECOVERED AT THE END OF THE THIRD YEAR PROJECTED NEW REVENUES: SALES PROBABILITY $200,000 30% $250,000 50% $300,000 20% COST OF GOOD SOLD 30% OF SALES VARIABLE CASH COSTS 10% OF SALES ANNUAL FIXED CASH COSTS: RENT $50,000 CLEANING $20,000 MAINTENANCE & OTHER $10,000 TOTAL FIXED COSTS $80,000 EQUIPMENT DISPOSAL PROCEEDS $19,400 SALVAGE VALUE AT THE END OF YEAR 6 FIRM'S COST OF CAPITAL 12.00% TAX RATE 35% NOTE - WHEN COMPUTING TAX, A NET LOSS FOR THE YEAR MEANS A POSITIVE TAX SAVINGS IS CREATED SINCE THERE IS OTHER INCOME TAX ON OTHER INCOME TO OFFSET. DEPRECIATION RATES FOR TAX PURPOSES: YEAR ONE 20.00% YEAR TWO 32.00% YEAR THREE 19.20% YEAR FOUR 11.50% YEAR FIVE 11.50% YEAR SIX 5.80% ASSUMPTIONS: ALL CASH FLOWS IN YEARS 1-6 OCCUR AT THE END OF THE YEAR. ALL INITIAL CASH INFLOWS OR OUTFLOWS OCCUR TODAY.

REQUIRED: A. ASSUMING SALES ARE $200,000 COMPUTE THE PAYBACK, IRR AND NPV. FOR THE NPV, COMPUTE AT BOTH THE FIRM'S DISCOUNT RATE AND 16%, WHICH IS A 4% PREMIUM ADDED TO THE RATE. B. COPY THE WHOLE WORKSHEET AND SOLUTIONS FOR PART A TO THE WORKSHEET NAMED PART B, AND REDO THE COMPUTATIONS BY CHANGING THE ANNUAL SALES TO $250,000. C. COPY THE WHOLE WORKSHEET AND SOLUTIONS FOR PART A TO THE WORKSHEET NAMED PART C, AND REDO THE COMPUTATIONS BY CHANGING THE ANNUAL SALES TO $300,000.

You should place your answers in each of the boxes shown below color-coded in Yellow color.

PART A YEARS 0 1 2 3 4 5 6 INITIAL INVESTMENT (NO INCOME TAX AFFECTS) COST OF THE EQUIPMENT NEEDED $ WORKING CAPITAL NEEDS TOTAL INITIAL INVESTMENT

ANNUAL OPERATING RECEIPTS: (using the information given above, fill in the blanks below to determine each year's operating cash flow): SALES $ $ $ $ $ $ LESS COST OF GOODS SOLD GROSS PROFIT LESS VARIABLE COSTS LESS FIXED COSTS LESS DEPRECIATION EXPENSE PROFIT (LOSS) BEFORE TAX LESS INCOME TAX EXPENSE (BENEFIT) PROFIT (LOSS) AFTER TAX PLUS DEPRECIATION EXPENSE TOTAL OPERATING CASH INFLOWS $ $ $ $ $ $

SALVAGE VALUE ON EQUIPMENT: (figure out the salvage value of the equipment for tax purposes): PROCEEDS $ LESS TAX BASIS OF EQUIPMENT: COST ACCUMULATED DEPRECIATION TAX BASIS GAIN ON SALVAGE LESS INCOME TAX ON SALVAGE GAIN NET PROCEEDS ON SALVAGE AFTER TAXES $

RELEASE OF ORIGINAL WORKING CAPITAL NEEDS (NO TAX AFFECT) $

TOTAL CASH INFLOWS (OUTFLOWS) CUMULATIVE CASH INFLOWS (OUTFLOWS)

THREE METHODS OF EVALUATION: PAYBACK PERIOD YEARS (round to 2 decimal places). INTERNAL RATE OF RETURN Answer is in %-2 decimal places please. NET PRESENT VALUE AT 12.00% Answer is in $-round answer to nearest dollar. NET PRESENT VALUE AT 16.00% Answer is in $-round answer to nearest dollar.

Note: Pages 375-380 in your course textbook show you how to calculate the Payback Period, the Internal Rate of Return, and the NPV.

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.

JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.

Web sites like justanswer.com/legal ...leave nothing to chance.

Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.

Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.

I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.Freshfield, Liverpool, UK

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.GPHesperia, CA

I couldn't be more satisfied! This is the site I will always come to when I need a second opinion.JustinKernersville, NC

Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. EstherWoodstock, NY

Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know. RobinElkton, Maryland

He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here.DianeDallas, TX

Meet The Experts:

LogicPro

Engineer

Satisfied Customers:

4925

Expert in Java C++ C C# VB Javascript Design SQL HTML