Blocks Ltd faces a decision about a new mould to be used

(Cost of capital, capital budgeting, capital budgeting: adjusting for risk and inflation)

Blocks Ltd faces a decision about a new mould to be used for the manufacturing of bricks. The management of the company needs advice to reach a decision on this purchase as the strategy it wants to follow would require the new mould. However, it is not willing to accept an unprofitable, lengthy or overly risky investment at this point in time.

Currently the company is financed solely through equity but has access to a credit facility at an 8% before-tax cost of debt. The company has R2 000 000 in retained earnings to be used before the credit facility is used. The current cost of equity for the company is 12% and the company is taxed at 30%.

The mould will have a life expectancy of four years. It will cost R6 000 000 to purchase and R1 000 000 to deliver and install. The purchase of the mould and putting it to use will lead to an increase of R1 000 000 in net operating working capital (NOWC).

Year     Sales generated

1 R2 500 000

2 R3 500 000

3 R4 000 000

4 R2 000 000

The mould will be sold for use at a price of R500 000 at the end of the four-year period. Capital gains are taxed at the 30% rate.

The mould will require overheads of R200 000 per year and variable costs will amount to 20% of sales for each year.

Depreciation takes place on a straight-line basis over the course of the life of the mould.

Required:

Determine the NPV, IRR and MIRR of the mould.

Also determine the NPV of the machine using the real rate of return method to adjust for inflation of 5% and assuming risk premium of 1,2 is applied.

Evaluate the decision and provide a brief report on the acceptability and risk of the project.

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Arnold Inc. is considering a proposal to manufacture​ high-end protein bars

Arnold Inc. is considering a proposal to manufacture​ high-end protein bars used as food supplements by body builders. The project requires use of an existing​warehouse, which the firm acquired three years ago for $3 million and which it currently rents out for $120,000. Rental rates are not expected to change going forward. In addition to using the​ warehouse, the project requires an upfront investment into machines and other equipment of $1.5 million. This investment can be fully depreciated​ straight-line over the next 10 years for tax purposes. ​

However, Arnold Inc. expects to terminate the project at the end of eight years and to sell the machines and equipment for $ 559 comma 000 $559,000. ​ Finally, the project requires an initial investment into net working capital equal to 10 percent of predicted​ first-year sales. ​Subsequently, net working capital is 10 percent of the predicted sales over the following year. Sales of protein bars are expected to be $4.9 million in the first year and to stay constant for eight years. Total manufacturing costs and operating expenses​ (excluding depreciation) are 80 percent of​ sales, and profits are taxed at 30 percent.

a. What are the free cash flows of the​ project?

The FCF for year 0 is ​$ −1.990 million.

The FCF for years​ 1-7 is ​$ __________ (round to 3 decimal places) ——- need help answering this million. (Round to three decimal​ places.)

b. If the cost of capital is 15%​, what is the NPV of the​ project?

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Watch some videos on How Recruiters Find Employees Through LinkedIN

Watch some videos on How Recruiters Find Employees Through LinkedIN and write a 1 page paper about the videos. Here are some areas that you must cover in your paper below:

1. How do Employers look for potential employees through LinkedIN?

2. What are the advantages for an Employer to use LinkedIN ?

3. What types of tools are available for Recruiters in LinkedIN? Explain what they are and how the work.

4. What did you learn from the video that will help you as a user of LinkedIN?

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The case presents you with financial ratios for eight pairs of unidentified

Case 7: The Financial Detective, 2005

The case presents you with financial ratios for eight pairs of unidentified companies and asks you to mate the description of the company with the financial profile derived from the ratios. Maybe we can then identify the company based on the description. The primary objective of this case is to introduce you to financial ratio analysis—in particular, the range of ratios and the insights each one affords.

The structured exploration of pairs of companies within an industry affords a number of important insights into strategy and financial performance. First, the economics of individual industries account for significant variations in financial ratios because of differences in technologies, product characteristics, or competitive structures. Second, financial performance results from managerial choices: within industries, the wide variation in financial ratios is often a result of the differences in corporate strategy in marketing, operations, and finance.

The company pair is E and F which is computers.

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The Federal Open Market Committee (FOMC) will meet on June 13th

The Federal Open Market Committee (FOMC) will meet on June 13th and June 14th. The results of the meeting can be found in the Press Release from the Board of Governors of the Federal Reserve System which is normally on Wednesday at 1:00 pm Central Time. IN one page or less, address the following:

1. Summarize the action(s), if any, taken by the FOMC as per its Press Release.

2. Explain why the FOMC took this action.

3. Discuss the effect the FOMC’s actions (or lack of actions) had on the following:

  a. The stock market as measured by the Dow Jones Industrial Average, immediately after the press release (e.g. Dow up or down xx points)

b. Interest rates (use the 3-month and 10- year U.S. Treasury securities yields and explain if rates went up on down and by how many basis points).

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The earnings, dividends, and stock price of Shelby Inc. are expected

The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7% per year in the future. Shelby’s common stock sells for $23 per share, its last dividend was $2, and the company will pay a dividend of $2.14 at the end of the current year.

a. Using the discounted cash flow approach, what is the cost of equity?

b. If the firm’s beta is 1.6, the risk-free rate is 9%, and the expected return on the market is 13%, then what would be the firm’s cost of equity based on the CAPM approach?

c. If the firm’s bonds earn a return of 12%, then what would be your estimate of rs using the over-the-own-bond-yield-plus-judgmental-risk-premium approach? Use the midpoint of the risk premium range.

d. On the basis of the results of parts a through c, what would be your estimate of Shelby’s cost of equity?

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Use the company Cirrus Logic, Inc. to write up a report that includes

Use the company Cirrus Logic, Inc. to write up a report that includes the following:

Determine what the company’s policy is related to long-lived assets, goodwill, and other intangible assets.
  Identify what the company says about its annual goodwill impairment testing.
  Identify whether the company has any deferred tax assets and liabilities, and summarize what the company says about these items in the 10-K.
  Identify the disclosures related to long-term debt, leases, and other long-term liabilities.
  Based on your additional analysis of the company, how has your evaluation of the company’s financial health changed since your analysis during Week 1?

The word count cannot exceed 525 words

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Identify a product that you would like to sell and the customer or audience

Identify a product that you would like to sell and the customer or audience to which you will deliver your sales pitch.

Write a 200- to 250-word written elevator pitch. The elevator pitch should include:

“Hook”
The problem
The solution
Your product’s differentiation
Value

Format your assignment consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

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Sam is an employee of ABC Paper Corp. He signed a non-disclosure

Sam is an employee of ABC Paper Corp. He signed a non-disclosure agreement as a condition of his employment with ABC. Sam is approached by XYZ Paper Co. with an offer of employment, but only if he brings his client list with him. Sam was fully responsible for creating his client list, so he agrees to provide it to XYZ. When Sam downloads his client list onto an external flash drive, he is caught in the act by his boss Natalie. Sam grabs the flash drive and runs out of his office, shoving Natalie aside when she attempts to stop him. Natalie falls and hits her head against the doorknob, suffering a concussion

What intellectual property was committed?

If so, what type? Discuss if Sam’s actions are ethical. Why or why not?

Discuss the types of tort, if any, Sam committed. Did any of the other parties in this scenario commit a tort?

Discuss if any of Sam’s actions subject him to criminal liability.

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Bart Smith settled the Smith Children’s Trust on September

Bart Smith settled the Smith Children’s Trust on September 30, 2012 (EIN: 45-1792583).  In 2016, the Trust had items of income and expense as follows:

Amount Allocable to
Income        Principal

Qualified Dividends            $23,149
Ordinary Dividends             3,319
Rental income from house         21,250
Charitable Gift to Salvation Army     10,000
Tax-exempt interest             18,000
Rental expenses             3,575
Trustee’s fee                850    $    850
Fee for preparation of tax return    725
Capital gain on sale of stock                18,173
Distribution of income:
Frank                17,150
Sally                12,200

The trust agreement appointed Smalls Bank and Trust as its trustee with broad discretionary authority, including the Trustee’s authority to distribute income to Frank and Sally during its 20-year term.  The trustee has decided to allocate a portion of the estimated taxes to the beneficiaries this year. On July 1, 2032, the Trust will terminate and the assets will be distributed equally to Frank and Sally, irrespective of any distributions the beneficiaries received during the life of the Trust (i.e. separate shares are not maintained for Frank and Sally).  The Trustee has never allocated any estimated tax payments to the beneficiaries and the Trust provides that capital gains are to be treated as “principal” by the Trustee.

Smalls Bank and Trust    Frank Smith        Sally Smith
189 24th St.        5241 Union        7152 Forest
Port Huron, MI 48007    Portsville, MI 48018    Livonia, MI 48054
EIN:  38-1212853    SS:  287-49-1715    SS: 287-48-2372

Please prepare the 2016 Form 1041 and any other form or schedule required for the Smith Children’s Trust.  This Return will be due on or before class June 15, 2017.

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