Outback Beverages is considering a project for a new beverage called Koala-Kola. The project would require new assets today costing $200,000 that would be written off immediately under the new tax laws since Outback anticipates having enough other income to write this cost off against. Additional net working capital of $10,000 would be needed at the beginning of the project’s life. The project has a 4-year expected useful life with an expected salvage value of $50,000 and a book value of zero at the end of the 4-year expected useful life. Outback expects Koala-Kola annual sales of $90,000 and annual operating costs of $30,000 during the 4-year life of the project. Outback Beverages marginal tax rate is 25% and their WACC is 10%. What is the total year 4 (operating plus terminal) cash flow for the Koala-Kola project?

Which of the following is the least effective way to reach a potential sales prospect? referral cold call direct mail personal visit

Suppose that xtel currently is selling at $40 per share. you buy 500 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. the rate on the margin loan is 8%. a. what is the percentage increase in the net worth of your brokerage account if the price of xtel immediately changes to (a) $44; (b) $40; (c) $36? (leave no cells blank - be certain to enter "0" wherever required. negative values should be indicated by a minus sign. round your answers to 2 decimal places.) b. if the maintenance margin is 25%, how low can xtel’s price fall before you get a margin call? (round your answer to 2 decimal places.) c. how would your answer to requirement 2 would change if you had financed the initial purchase with only $10,000 of your own money? (round your answer to 2 decimal places.) d. what is the rate of return on your margined position (assuming again that you invest $15,000 of your own money) if xtel is selling after one year at (a) $44; (b) $40; (c) $36? (negative values should be indicated by a minus sign. round your answers to 2 decimal places.) e. continue to assume that a year has passed. how low can xtel’s price fall before you get a margin call? (round your answer to 2 decimal places.)

You are evaluating two different silicon wafer milling machines. the techron i costs $285,000, has a three-year life, and has pretax operating costs of $78,000 per year. the techron ii costs $495,000, has a five-year life, and has pretax operating costs of $45,000 per year. for both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $55,000. if your tax rate is 24 percent and your discount rate is 11 percent, compute the eac for both machines.