Finance Questions

Finance Questions 

Question:

explain issues that can arise in the financial valuation of an international firm?

Question:

7a) Replacing El Poderoso

Questions

  • Assume the prof will finance $20,000 dollars1and that interest in compounded monthly.
  • What will be the monthly payments be over a three-year amortization plan? What are they over four years?[1]
  • What is the net present value in the difference of the finance programs of the Golf and the Matrix?
  • Assume the Volkswagen Dealer does not want to change his price: what equivalent price does the Toyota dealer have to offer to make the two cars’ prices equivalent?
  • Assume neither dealer lowers their price: what value would the qualitative factors have to be in order to make the two cars’ prices equivalent?
  • Question:

    Suppose you need $1 million dollars to start your Dream Business. Research ways to get the money for such a business. Compare two (2) sources of financing you might obtain. (e.g., Small Business Administration (SBA), private investors, private loans, personal assets, and / or personal credit cards.) Identify the risks and benefits of your two (2) choices.

     

Question:

The details of a 4-year investment proposal to replace an old machine are as follows:

Capital cost of a new 4-year machine = $10,000

Salvage value of new machine in year 4 = $1,000

Current salvage value of old machine = $1,000

Current book value of old machine = $0

Extra initial inventory = $3,000 will be fully recovered when the project is finished

Existing warehouse building to install the new machine can be sold for $2,000 after-tax today and is worthless in four years’ time

R & D = $2000 spent in the previous year

Increase in before-tax revenue = $5,000 p.a.

Increase in before-tax operating costs = $1,000 p.a.

Allocated overhead = $800 of the existing overhead expense

Annual depreciation of new machine on straight-line prime cost basis = $2,500

Tax rate = 40%

What should be the Capital Cash Flow in year 4?

what should be the annual Operating Cash Flow in year 3?

what is the Capital Cash Flow in year 0

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